PART I. PRACTICAL IIS FORMATION CONCERNING THE PUBUO DEBT OF THE UNITED STAIES, PRACTICAL INFORMATION CONCEEHIHQ TEE PUBLIC DEBT OF THE UNITED STATES, WITH THE NATIONAL BANKING LAWS. BY WILLIAM A. EICHAEDSON, BECRETABY OF THE TBEABU3 /: WASHINGTON, D. C.: W. H. & 0. H. MOEEISON, LAW PUBLISHERS AND BOOKSELLERS. 1873. 87 Entered according to Act of Congress, in the year 1872, by WILLIAM A. RICHARDSON, In the Office of the Librarian of Congress, at Washington, D. C, . - VI 1M CONTENTS. PART I. PRACTICAL INFORMATION CONCERNING THE PUBLIC DEBT. CHAPTER I. PAGE. Bonded debt not matured, payable in coin . 7 CHAPTER II. Debt which has ceased to bear interest; coin certificates; certifi cates of deposit; debt bearing interest in currency 25 CHAPTER III. United States notes and fractional currency ; distinctive paper; exchange of mutilated and defaced notes, etc . 35 CHAPTER IV. Registered and coupon bonds, how transferred; issue of dupli cates in case of loss or destruction; conversion of bonds; pay ment of interest ,,.- 55 CHAPTER V. Coin in the treasary ; sale of gold; purchase of bonds; redemp tion ofbonds; monthly debt statement ! 72 CHAPTER VI. Obligation to pay principal and interest in coin; the sinking fund; taxation of United States bonds 79 CHAPTER VII. Established policy of the country, coeval with the constitution, to maintain the public credit, to gradually pay the principal of all loans, and to avoid a permanent national debt 88 M114911 CONTENTS. PART II THE NATIONAL BANKING LAWS OF THE UNITED STATES, WITH NOTES AND REFERENCES TO THE DECISIONS OF THE COURTS AND OPINIONS OF THE ATTORNEYS GENERAL THEREON. 1. Preliminary observations 99 2. Act of June 3, 1864, authorizing the formation of national banks 101 3. Act of June 30, 1864, section no, taxing State banks, &c__ 142 4 Act of March 3, 1865, taxing notes of State banks, &c., and relating to State banks converted into national banks 145 5. Act of March 2, 1867, in relation to three per cent, certifi cates which may be held by banks as part of their reserves. 147 6. Act of March 26, 1867, section 2, taxing the notes of towns, cities, and municipal corporations 148 7. Act of February 10, 1868, defining the "place" where banks may be taxed 148 8. Act of February 19, 1869, to prevent the loaning of money on united States notes and the withholding of them from use_ 149 9. Act of March 3, 1869, requiring returns from banks 149 10. Act of March 3, 1869, in relation to certified checks 151 11. Act of April 6, 1869, to punish persons aiding or abetting officers of banks in embezzling funds 151 12. Act of July 8, 1870, declaring what officers are subject to the penalties against embezzlement 152 13. Act of July 12, 1870, to provide for the redemption of three per cent, certificates, for an increase of national bank notes, and for the formation of national gold banks 152 14. Act of July 14, 1870, requiring national banks going into liquidation to retire their circulating notes 157 15. Act of June 6, 1872, amending act taxing State banks, &c__ 158 16. Regulations as to payment of duties by national banks 160 INDEX 165 CHAPTER 1. BONDED DEBT NOT MATURED, PAYABLE IN COIN. , 00 1-^ O 1C Tfl Tf Tfl <M rH O CO CO CO CO CO CO O CO COCO CO CO CO CO CO CO O5 CO OOCO _---.._ _ ~ - >- CL > t> !>>>>> ^ ~ t>j - -7: "5 "^ o o o <3 ^ o> K^ m ^ |z; ; ;z; ^ S h-jfi ia M 1 i icocMooGio^rir-ij^T-i : : rt< ooi>>.i>.i>.-oDcoJc--aocooo : : > COCOCOCOCOCOCOCOCOCOCO . 00 1 -; r-T rn" r-T r-T ^-T r4 r-T r-To" ^-T o" : i ,_" p H D5 ^ < . f_ . -CO hi W : ^> ^ >~> > > > > S-HJ-, >j^ - 4^ ^^^oo o*g^ g S t-3 t-7. I-, ^J P5 [25 ^ t-3 S 1-3 ; 1-5 So o o o o o oo o o oo o OOOOOOOOOO 000 0000000000 ooo O O* i-O lO *O O O O 10 iO O O O TfC<)T iCOt^OCOOr ICO OOO 8 I S3 coco-HCOOsoJ^OO--i Oi-OO (NJt~COCNO5COQC5M ^ T-H O CO CO O CD r-t (M 10 O O CO O r^ O o 1 O CO lO t- iO J>- C.M -^ >O <rH O5 CO O O CO r-l O O CO C^ I>- CD OO i CM C\l CO ^ r-l r-H CM t 1 ^> os s ING APIUI s 8OOOOO OOOO OOO 00000 0000 000 O O 00 00 uOOO OOO OtOOO OOO <M Ci_ r-^ r_ CO_ p O O CO CO OOO 8 lO o 2 ^J O" C<f CO" "^" O5~ CO ^J^HOir^ lOCDlO O J:^- 1^ OO C5 -H ^f O Ci O -^H IO lO 1 T OUTS r-T T}H" -^H" oo" CD Tti ^ir-icoco -^HCO J>- ->] Cxi TJH r-l CO IO O1 CO O ^r- ^3 r-H r-l OQ o 0_ AMOUN 1 B OOOOOOOOOO : O O OOOOOOOOOO | O O o o 3b oio^it^-^i>-cooor-co c:>io OiOOOiOOO5(NC35CT)-rH 1C -*< 00 r-H Ci CO TJH t^ 01 O tfl 1- lO t- O J>- 1^ -* CO^OCOCOOIOIOCOOIO COCO (M T 1 O . O CO CO TjH IO 00 CM r-l <# r-l rH ; B g 6 1 >">>i>;^> > >-^?>;> ^. >;>;>; c3 O ^"^"72 O O O 5T I *"3 O ~ ii g^ ^^^a^^^lz;^ ^rH ^ I E? OH ^ ^d c d ^ ^ ^ " d ^ d d d d r ^5 rf ^ Cj^^tS^Ci^ c* r^H^r-3 r-3 r-j ^ ^ ^ K=3r-5 ^-J r-, >-i r-j r-j <3> 1 IOOCOCDCOCDCOIOCCCOCO CCCOiO f, \ OOOQOOO c:o^a ^ co"oo i>Tt^ icT 1 ^ . < ^ M "" co _} CC^CDOOo^ra M.w^ 1 f2 ffi >, P 00 cocococooocoo c -H o CD ;2_;o r-.- -co 00 3 CCc!^^^ - "! - s S -5 ^^ ^~ 5 a ^o o^-S^^g gSg -2^S ^^^^fS^S^ T3 . w w t oa w OD & > -gr-f ^O^g: .0 . c ^ "o li ssiais *s"! 5 6 s-? g n| g ^ l| 5 g g^ g^ g^ ,o.>g.>^.>S g go.>S g^ S S o o P=H PH 1 "^ pq Hr-^ fr |-q Oh-^ rJ rHCN|COTtHlOcdj>odC5OT-H CM - CO r^~ & p tb bD <! THE FUNDED LOANS. [CHAP. I. Outstanding loans not matured. Refunding act of 1870. Bonds at 5 per cent, interest. The bonds of the United States, of which both the princi pal and interest are payable in coin, now outstanding, and neither called in for payment nor fully matured, are known under fourteen distinct titles, representing that number of different loans, which are kept entirely separate on the books of the Treasury Department. Coupon bonds may be exchanged for registered stock either in the same or other denominations, and mutilated, defaced, or indorsed bonds may be returned and clean new bonds obtained therefor ; but all such exchanges must be in the same loan, and the bonds of one issue can never be converted into nor combined with those of either of the others. The table at the head of this chapter gives the titles, amounts, times of payment of principal and interest, and the rate of interest of all such loans, in chronological order, beginning with that of the latest date and extending back to that of the earliest issue, the loan of 1858; a full expla nation of each of which is contained in the following pages of this chapter, under numbers referring to the loans as set forth in the table. 1. THE FUNDED LOANS. To enable the Secretary of the Treasury to fund at a lower rate of interest that part of the national debt represented by the five-twenty bonds, bearing six per cent, interest, Congress passed the following act : AN ACT TO AUTHORIZE THE REFUNDING OF THE NATIONAL DEBT. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury is hereby authorized to issue, in a sum or sums not exceeding in the aggregate two hundred million dollars Coupon or registered bonds of the United States, in such form as he may prescribe, and of denominations of fifty dollars, or some multiple of that sum, redeemable in coin of the present standard value, at the pleasure of the United States, after ten years from the date of their issue, and bearing interest, payable semi-annually, in such coin, at the rate of five per cent, per annum ; CHAP. I.] THE FUNDED LOANS. 9 Also a sum or sums not exceeding in the aggregate three At 4% per cent. hundred million dollars of like bonds, the same in all res pects, but payable at the pleasure of the United States, after fifteen years from the date of their issue, and bearing interest at the rate of four and a half per cent, per an num ; Also a sum or sums not exceeding in the aggregate one At 4 percent. thousand million dollars of like bonds, the same in all res pects, but payable at the pleasure of the United States, after thirty years from the date of their issue, and bearing interest at the rate of four per cent, per annum ; all of which said several classes of bonds and the interest thereon shall be exempt from the payment of all taxes or duties of the Exempt from United States, as well as from taxation in any form by or taxation, under State, municipal, or local authority; and the said bonds shall have set forth and expressed upon their face the above specified conditions, and shall, with their coupons, be made payable at the Treasury of the United States. But nothing in this act, or in any other law now in force, Debt not to be in shall be construed to authorize any increase whatever of the creased - bonded debt of the United States. SEC. 2. And be it further enacted] That the Secretary of Bonds, how sold the Treasury is hereby authorized to sell and dispose of any nndissued - of the bonds issued under this act, at not less than their par value for coin^ and to apply the proceeds thereof to the redemption of any of the bonds of the United States out standing and known as five-twenty bonds, at their par value, or he may exchange the same for such five-twenty bonds, par for par ; but the bonds hereby authorized shall be used for no other purpose whatsoever. And a sum not exceeding one-half of one per cent, of the bonds herein authorized is hereby appropriated to pay the expense of preparing, issuing, advertising, and disposing of the same. SEC. 3. And be it further enacted, That the payment of how called in any of the bonds hereby authorized, after the expiration of ^payment. the said several terms often, fifteen, and thirty years, shall be made in am ounts to be determined from time to time by the Secretary of the Treasury, at his discretion, the bonds so to be paid to be distinguished and described by the dates and numbers, beginning for each successive payment with the bonds of each class last dated and numbered, of the time of which intended payment or redemption the Secretary of the Treasury shall give public notice, and the interest on the particular bonds so selected at any time to be paid shall cease at the expiration of three months from the date of such notice. 10 THE FUNDED LOANS. [CHAP. I. Interest pnyablo quarterly. SEC. 4. [Authorizes the Secretary to call in for payment the five-twenty bonds.] See Chapter V. SEC. 5. [Provides for the issue of coin certificates for gold deposits. Expired ~by limitation. ] SEC. 6. [Relates to the sinking fund. ] See Chapter VI. Approved July 14, 1870. undred The amount of bonds which may be issued of the five per Tent 011 cent, loan is increased to five hundred millions dollars, and the interest of any portion of the bonds of the funded loans may be paid quarter-annually, by the following act : AN ACT TO AMEND AN ACT ENTITLED "AN ACT TO AUTHORIZE THE KEFUNDINQ OF THE NATIONAL DEBT." Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the amount of bonds authorized by the act approved July fourteen, eighteen hundred and seventy, entitled "An act to authorize the refunding of the national debt," to be issued, bearing five per centum interest per annum, be, and the same is, increased to five hundred millions of dollars, and the interest of any portion of the bonds issued under said act, or this act, may, at the discretion of the Secretary of the Treasury, be made payable quarter-yearly : Provided, hoivever, That this act shall not be construed to authorize any increase of the total amount of bonds provided for by the act to which this act is an amendment. Approved January 20, 1871. Under these acts there are three loans called " FUNDED LOANS," from the object of the law, to refund the national debt at a lower rate of interest, differing from each other only in the rates of interest and in the times after which they may be redeemed, which latter difference gives to each its distinctive title. The " FUNDED LOAN OF 1881" is redeemable at the pleas ure of the United States after the first day of May, A. D. 1881, and bears interest at the rate of five per cent, per annum, payable quarterly. The " FUNDED LOAN OF 1886," provided for by law but not yet issued, is redeemable at the pleasure of the United Staters after the first day of May, A. D. 1886, and bears interest at the rate x)f four and a half per cent, per annum, payable quarterly. Funded, of IS SI, 5 percent. of 188G, 4^ per cent. CHAP. L] THE FUNDED LOANS. 1 1 The " FUNDED LOAN OF 1901," provided for by law but not on 901, 4 per yet issued, is redeemable at the pleasure of the United States cent> after the first day of May, 1901, and bears interest at the rate of four per cent, per annum, payable quarterly. The bonds of each of these issues, unlike those of any Payable m coin, other loan ever issued by the Government, express upon their face, in accordance with the requirements of the law, applicable to these bonds alone, that the principal and in terest are " payable in coin of the standard value of the United States, July 14, 1870," the date of the passage of the act, and that both are "exempt from payment of all Exempt from taxes or duties of the United States, as well as from taxa- taxation - tion in any form by or under State, municipal, or local authority." The interest is payable quarterly, on the first days of interest February, May, August, and November, in each year; and that upon registered bonds is sent by checks directly to the holders of the bonds at any post-office address designated by them, in this country or in Europe. Coupon bonds all bear date May 1, 1871, and both the coupon and registered bonds are designated on their face " FUNDED LOAN OF 1881," or "OF 1886," or "OF 1901," with the rate of interest. Two hundred millions dollars of the five per cents, have already been negotiated ; but as yet none of the four per cents, and four and a half per cents, have been issued. These are the only loans now offered for sale by the Gov- oniyioan now of- eminent. All others, having long since been closed, are being reduced as rapidly as the surplus revenues, the money obtained from the sale of the new bonds, and the coin in the Treasury, will permit. The reduction of the public debt for three years last past has been at the rate of about a hundred millions dollars a year ; and the proceeds of the sale of the Funded Loan, which can be used only to redeem the five-twenty bonds and not to increase the public debt, has still further reduced the amount of bonds bearing six per cent, interest. The bonds are all printed on the distinctive paper adopted Bonds are print- fered by Govern ment. ed on distinctive supervision of the Department, as described in Chapter III. by the Secretary of the Treasury, and manufactured under the CONSOLS. [CHAP. I. The denominations are $50, $100, $500, $1,000, $5,000, and $10,000 coupon and registered bonds, and $20,000 and $50,000 also of the registered bonds. Consols. Acts of authorizn- tion. Origin of the ap plication of the name of CONSOLS, to. 2, 3, 4. CONSOLS OF 1865, OF 1867, AND OF 1868; or FIVE-TWENTIES OF 1865, OF 1867, AND OF 1868. The act of Congress of March 3, 1865, (chapter 77,) au thorized the Secretary of the Treasury to borrow on the credit of the United States any sums not exceeding in the aggregate six hundred millions of dollars, and to issue therefor bonds or treasury notes, the bonds to be in denomi nation not less than fifty dollars, and made payable at any period not more than forty years from date, or made re deemable and payable, as aforesaid, as might be expressed upon their face, with interest payable semi-annually. The act provided that the principal or interest, or both, of the bonds and treasury notes might be made payable in coin, or in lawful money ; that the rate of interest, when payable in coin, should not exceed six per cent., and that the rates and character of interest should be expressed on all such bonds or treasury notes. The act still further provided, that the treasury notes should be made convertible into any bonds authorized by the act; that any treasury notes or other obligations bear ing interest, issued under any act of Congress., might, at the discretion of the Secretary of the Treasury, and with the consent of the holder, be converted into any description of said bonds; and that the bonds so authorized should not be considered a part of said six hundred millions. This provision for conversion was extended by act of April 12, 1866, (chapter 39,) so that the Secretary was authorized to receive any treasury notes or other obligations issued under any act of Congress, ivlietlier bearing interest or not, in ex change for any description of said bonds. The conversion CHAP. I.] FIVE-TWENTIES 1865. 13 or consolidation of other outstanding obligations into these loans gave to them the titles of CONSOLS, as they are called in the Treasury Department ; hut being redeemable at the Also called GV<^ pleasure of the Government after five years, and payable in i twenty years from the date of issue, they are better known in the market as FIVE-TWENTIES of the different years of issue 1865, 1867, and 1868. Under the provisions of the two acts above mentioned, for the conversion of treasury notes and other obligations, these issues of bonds were made and designated CONSOLS OF 1865, OR FIVE-TWENTIES OP 1865, which bear consols of i& date July 1, 1865, became redeemable at the pleasure of the Government after July 1, 1870, and will be payable July 1, 1885. The amount issued was 332,998,950. CONSOLS OF 1867, OR FIVE-TWENTIES OF 1867, which bear -of iso?. date July 1, 1867, became redeemable at the pleasure of the Government after July 1, 1872, and will be payable July 1, 1887. The amount issued was $379,602,350. CONSOLS OF 1868, OR FIVE-TWENTIES OF 1868, which bear -of iscs date July 1, 1868, became redeemable at the pleasure of the Government July 1, 1873, and will be payable July 1, 1888. The amount issued was $42,539,350. The bonds of these loans are all designated on their face Bonds, how do* with the words: "CONSOLIDATED DEBT, ISSUED UNDER ACT lgna1 OF CONGRESS APPROVED MARCH SD, 1865;" "REDEEMABLE AFTER FIVE AND PAYABLE TWENTY YEARS FROM DATE ;" and "!N GOD is OUR TRUST." The interest is at the rate of six per cent, per annum, interest, when payable semi-annually, January 1 and July 1, in each year. P ayable - Denominations: $50, $100, $500, and $1.000 coupon and Denomination, registered bonds, and also |5,000 and $10,000 registered. 5. FIVE-TWENTIES OF 1865. Of the six hundred millions of bonds authorized by the Five-twenties of act of March 3, 1865, chapter 77, and the act of April 12, 1866, chapter 39, (under which the consols were issued by conversion of other obligations,) there were sold for money 11 Title of loan. interest When redeem- able and payable. Designated. FIVE-TWENTIES, JUNE, 1864. [CHAP. I. Five-twenties of June, 1864. Bonds Issued. Redeemable, Interest Designation of bonds- and issued, $203,327,250, entitled, from the time after which they might be redeemed five years and the time of he- coming payable twenty years and the date of their issue. c < FIVE-TWENTIES OF 1865 . " Like the consols they hear inter est at the rate of six per cent, per annum, and are redeem- able at the pleasure of the Government after five years and p a y a ^ e i n twenty years from date, but unlike them, bear date November 1, 1865, and have the interest payable May 1 and November 1, in each year. They are designated on their face by the words c REDEEMABLE AFTER FIVE, AND PAYABLE TWENTY YEARS FROM DATE, and "ACT OF MARCH 3D, 1865." Denominations: $50, $100, $500, and $1,000 coupon and registered bonds, and also $5,000 and $10,000 registered. For more full explanations of the provisions of the acts under which this loan was negotiated, see "Consols," page 12. 6. FIVE-TWENTIES OF JUNE, 1864. The act of June 30, 1864, chapter 1*72, authorized the Secretary of the Treasury to borrow, from time to time, on the credit of the United States, four hundred millions of dollars, and to issue therefor coupon or registered bonds, redeemable at the pleasure of the Government after any period not less than five nor more than thirty years, or, if deemed expedient, made payable at any period not more than forty years from date, and bearing interest, in coin, at the rate of six per cent, per annum, payable semi-anrmally. The amount issued was $125,561,300, in coupon and registered bonds, of $50, $100, $500, and $1,000, and also in registered bonds of $5,000 and $10,000, bearing date November 1, 1864, redeemable at the pleasure of the United States after the 31st day of October, 1869, and payable on the 1st day of November, 1884, with interest from the 1st day of November, 1864, inclusive, payable on the 1st day of May and November in each year. These bonds are designated on their face,, "Six PER CENT. LOAN, UNDER ACT OF JUNE 30, 1864," and "KEDEEMABLE AFTEB TEN-FORTIES. 15 FIVE, AND PAYABLE TWENTY YEARS FROM DATE." The loan de- Title dloar. rives its title from the time after which it might be re deemed five years and the time of becoming payable twenty years with the month and year of the act of authorization. 7. FIVE-TWENTIES OF MARCH, 1864. This small loan, originally of $3,882,500, was issued Act of authorize - under the same act as the ten-forty loan, approved March 3, 1864, chapter 17", of that year, for the balance of the two hundred millions not taken up in ten-forty bonds. The act provided that the bonds should bear date March 1, 1864, or any subsequent period ; should be redeemable at the pleas ure of the Government after any period not less than five years, and payable at any period not more than forty years from date, in coin, and of such denominations as might be found convenient, riot less than fifty dollars, bearing inter est not exceeding six per cent, a year, payable annually on bonds not over one hundred dollars, and semi-annually on all others, in coin. The title is derived from the time after which they might Title and desig- be redeemed five years and the time of becoming pay- natlon able twenty years with the month and year of the pas sage of the act of authorization ; and the face of the bonds bears the words, " REDEEMABLE AFTER FIVE, AND PAYABLE TWENTY YEARS FROM DATE," and " ACT OF MARCH 3, 1864." There are no coupon bonds of this issue. The registered Bonds uii regis* bonds are made redeemable at the pleasure of the United Redeemable and States after the 31st day of October, 1869, and payable on payable, the 1st day of November, 1884, with interest at six per cent, interest. per annum, payable semi-annually, on the 1st days of May and November in each year. Denominations; $100, $500, $1.000, and $5, 000. 8. TEN-FORTIES, Issued under the act of March 3, 1864, -chapter 17,. as Ten-forties, were the " five-twenties of March, 1864. * 16 SIXES OF 1881. [CHAP. L Title, Designation. renomination. Redeemable and payable. Interest. Amount It is the only loan ever issued with the provision that it might be redeemed in ten, and made payable in forty years from date, and takes its title from that fact. The bonds are designated on the face FIVE PER CENT. LOAN, UNDER ACT OF MARCH SD, 1864," and "REDEEMABLE AFTER TEN, PAYABLE FORTY YEARS FftOM DATE." They are of the denomination of $50, $100, $500, and $1,000, registered and coupon, and also $5,000 and $10,000 registered, and are made redeemable at the pleasure of the United States after the 28th day of February, 1874, and payable on the 1st day of March, 1904, with interest at five per cent, per annum, payable on the 1st day of March and September in each year, except that upon the $50 and $100 bonds it is payable annually on the 1st day of March. The whole amount issued was $196, 117", 3 00. *.ct of authoriza tion. Title. 9. LOAN OF 1863 ; or SIXES OF 1881. The act of March 3, 1863, chapter 73, section 1, author ized the Secretary of the Treasury to borrow from time to time, on the credit of the United States, not exceeding nine hundred millions of dollars, and to issue therefor coupon or registered bonds, payable at the pleasure of the Government after such periods as might be fixed by the Secretary, not less than ten nor more than forty years from date, in coin, and at such denominations, not less than fifty dollars, as he might deem expedient, bearing interest, in coin, at the rate of six per cent, per annum, payable on bonds not exceeding $100 annually, and on all others semi-annually. The act of June 30, 1864, chapter 172, limited the amount to be issued to seventy-five millions, then already advertised. The title of this loan on the books of the Treasury De partment is c LoAN OF 1863," being the only one of that year ; but as the bonds bear six per cent, interest, and may be redeemed in 1881, they are commonly called in the mar- CHAP. I.] FIVE-TWENTIES OF 1862. 17 ket " SIXES OF 1881. There are, however, two other loans, commonly called, also, for the same reason, " SIXES OF 1881," but distinguished by the years of their respective issue. The certificate and bonds bear on the face this designa- Designation of tion: " TREASURY DEPARTMENT, ACT OP MARCH 3o, 1863," by which they may be distinguished from other sixes of 1881. The whole seventy-five millions were issued in registered Bonds issued. and coupon bonds of $50, $100, $500, and $1,000, and in registered also of $5,000 and $10,000, redeemable after the Redeemable, 30th day of June, 1881, with interest at six per cent, per interest. annum, payable on the 1st days of January and July in each year, and are still outstanding. 10. FIVE-TWENTIES OF 1862. Section 2, chapter 33, of the act of February 25, 1862, authorized the Secretary of the Treasury, in order to fund eatlon - the treasury notes and floating debt, to issue, on the credit of the United States, coupon or registered bonds, in sums not less than $50, to an amount not exceeding $500,000,000, redeemable at the pleasure of the United States after five years, and payable twenty years from date, and bearing in terest at the rate of six per cent, per annum, payable serni- annually. Subscription books were opened to the public for this loan, and upon closing the same, at the time specified in the ad- tion and vertisement, it was found that $511,000,000 had been sub scribed for. Congress, by act of March 3, 1864, chapter 17, section 2, authorized the issue of that amount, and by act of January 28, 1865, chapter 22, as construed, increased the amount authorized $4,000,000 more, making in all $515,000,000. There were actually issued $439,422,000 coupon, and $75,349,600 registered bonds. The title was derived from the time after which the bonds T . fl J. lilt? HUU CL&S might be redeemed five years ; the time when payable nation., 2 18 FIVE-TWENTIES OF 1862. [CHAP. I. Interest. Scries. First. Third. Fourth. Denomination. Redemption. twenty years ; and the year of the passage of the first act of authorization 1862. The bonds bear on their face the designation, " REDEEM ABLE AFTER FIVE AND PAYABLE TWENTY YEARS FROM DATE," and "LOAN OF FEBRUARY 25, 1862;" and are made redeemable at the pleasure of the United States after the 30th day of April, 1867; and payable on the first day of May, 1882, (except the first series, as hereafter explained,) with inter est at six per cent, per annum, payable on the first days of May and November in each year. The coupon bonds were issued in four series. Those of the first, amounting to one hundred millions of dollars, are printed in green tint, and have no designation of series upon them. They are made payable after, instead of on, the 1st day of May, 1882. This was an error in not following the language of the law, and was corrected in the subsequent series. Those of the second, also of one hundred millions of dol lars, are printed in yellow tint, with blue numbering, and have the words " SECOND SERIES," or U 2o SERIES," stamped upon them, twice on the bond and once on each coupon. Those of the third, also of one hundred millions of dol lars, are printed in black, with blue numbering, and have " THIRD SERIES" stamped twice on the bonds and once on each coupon. Those of the fourth, amounting to 139,422,000, are printed in black, with red numbering, and stamped as " FOURTH SERIES," or "4TH," in different styles and forms. The bonds are $50, $100, $500, and $1,000 coupon and registered, and also $5,000 and $10,000 registered. Section 4 of the refunding act of July 14, 1870, (chapter 256,) authorizes the Secretary of the Treasury to pay at par and cancel any five-twenty bonds after becoming re deemable, indicating and specifying, in public notices, by class, date, and number, in the order of their numbers and issues, beginning with the first numbered and issued, and declares that, in th^ee months after the date of such public notice, the interest on the bonds, so selected and advertised to be paid, should cease. By virtue of this law the Secre- CHAP. L] FIVE-TWENTIES OF 1862. 19 tary has called in for payment the following designated Bonds called in bonds, and has given notice thereof: FIRST CALL. Notice dated September 1 , 1871 . First can. All the first series of coupon bonds of $50 numbered 1 to 30,699 inclusive. $100 " 1 to 43,572 $500 " 1 to 40,011 $1,000 1 to 74,104 All registered bonds of $50 numbered 1 to 595 inclusive. $100 " 1 to 4,103 $500 " 1 to 1,899 $1,000 " 1 to 8,906 $5,000 " 1 to 2,665 $10,000 " 1 to 2,906 Which ceased to bear interest December 1, 1871. SECOND CALL. Notice dated December 7, 1871 * second can. Of the second series, all coupon bonds of $50 numbered 1 to 5,460 inclusive. $100 " 1 to 13,093 $500 " 1 to 7,964 $1,000 1 to 11,120 All registered bonds of $50 numbered 596 to 697 inclusive. $100 4,104 to 5,079 $500 " 1,900 to 2,483 $1,000 " 8,907 to 11,008 5,000 " 2,666 to 3,402 $10,000 2,907 to 3,899 Which ceased to bear interest March 7, 1872. THIRD CALL. Notice dated December 20. 1871 . Third can. Of the second series, all coupon bonds of $50 numbered 5,461 to 10.775 inclusive. $100 " 13,094 to 25,935 $500 " 7,965 to 16,179 $1,000 11,121 to 27,443 All registered bonds of $50 numbered 698 to 840 inclusive $100 5,080 to 5,.991 $500 " 2,484 to 2,958 $1,000 " 11,009 to 13,150 $5,000 3,403 to 4.102 $10,000 3,900 to 4,774 Which ceased to bear interest March 20, 1872. FOURTH CALL. -Notice dated March 1 , 1 873. n-ourtn ca.L Of the second series, all coupon bonds of $50 numbered 10,776 to 27,798 inclusive $100 " 25,936 to 66,646 $500 " 16,180 to 41,373 $1,000 " 27,444 to 71,259 20 Fourth call. SIXES OF 1881. Amount paid. Ufgulutious for paying called bonds and cou pons. Of the third series, all coupon bonds of- $50 numbered 1 to 1,200 inclusive. $100 " 1 to $500 " 1 to $1,000 " 1 to 4,752 3,000 5,733 All registered bonds of $50 num $100 $500 $1,000 $5,000 $10,000 aered 841 5,992 2,959 13,151 4,103 4,775 to 1,233 mcl to 8,803 to 5,360 to 20,680 to 6,402 to 7,092 asive. Which cease to bear interest June 1, 1873. Besides the bonds thus called in for redemption, amount ing to about $190,000.000, much of this loan has been pur chased at the monthly purchases in New York. For regulations of the Treasury Department as to paying bonds called in for redemption, when coupons have been detached therefrom, and the payment of coupons thus de tached, sec Chapter V, p. 75. Ar.ts of authori- j .ation. 11. LOAN OF JULY AND AUGUST, 1861 ; or SIXES OF 1881. By the act of July 17, 1SG1, chapter 5, the Secretary of the Treasury was authorized to borrow on the credit of the United States a sum not exceeding $250,000,000, and to issue bonds therefor, or treasury notes, in such proportions as he might deem advisable, the bonds to bear interest not exceeding six per cent, per annum, payable semi-annually, irredeemable for twenty years, and after that period redeem able at the pleasure of the United States. This law was amended by a supplementary act of August 5, 1861, chapter 46, of which section 1 authorized the Sec retary to issue bonds bearing interest at six per cent, per annum, and payable at the pleasure of the United States after twenty years from date, but no such bond to be issued for a less sum than five hundred dollars, and to exchange the same for treasury notes issued under the former act. Section 7 of the act of August 5 also provided, that the Secretary CHAP. I.} OREGON WAR DEBT. 21 might sell or negotiate, for any portion of the loan provided for by the act of July 17, bonds payable not more than twenty years from date, and bearing interest not exceeding six per cent, per annum, payable semi-annually. There was issued under these various provisions one Bonds issued loan, by sale $50,000,000, and by exchange $139,321,200, in bonds redeemable after the 30th day of June, 1881, with interest at six per cent, per annum, payable on the 1st days interest, of January and July in each year, designated on the face Payabla of each bond, "LOAN OF JULY 17, AND AUGUST 5, 1861," Designation a-n* from which the official title of the loan was derived. The bonds are also called in the market, " SIXES OF 1881," from the rate of interest and time of payment. The denominations actually issued are $50, $100, $500, Denomination, and $1,000 coupon and registered bonds, and also $5,000 and 10,000 registered. The whole amount of the original Not matured, loan is still outstanding, not having yet matured. 12. OREGON WAR DEBT. The act of March 2, 1861, chapter 70, entitled "An act Act of authorial to provide for the payment of expenses incurred by the Ter- * ritories of Washington and Oregon in the suppression of Indian hostilities therein, in the years 1855 and 1856," appropriated so much money as might be necessary for the payment of specific claims therein mentioned, and by sec tion 4 authorized the Secretary of the Treasury, if he deemed it expedient, to issue to the claimants bonds of the United States of a denomination not less than fifty dollars, redeemable in twenty years, and bearing interest at the rate of six per cent, per annum, with coupons attached, and payable annually or semi-annually, at the discretion of the Secretary. Under this act there were issued $1,090,850, all in cou- Bonds tamed: pon bonds, payable at any time after the first day of July, 1881, to a payee therein named, or order, in denominations Denomination of $50 and $100, with interest at six per cent., payable interest annually, July 1, in each year, and of $500, with interest 22 SIXES OF 1881. Tiile uiicl desig nation. Bonds payable to order. Coupons. at the same rate, payable semi-annually, Januaiy 1 and July 1. The bonds arc designated on the face, " OREGON WAR DEBT," and the loan takes its title from that fact. These bonds, unlike any other coupon bonds, being pay able to order, do not pass by delivery, but only by assign ments, duly executed in like manner as those required on registered bonds, by the payee or assignee thereof. The coupons pass by delivery. Of this loan $145,850 have been redeemed, and the bal ance, 945,000, will become redeemable July 1, 1881. Act of authoriza tion. Bonds issued. interest. Payable. Title. 13. LOAN OF FEBRUARY, 1861 ; or SIXES OF 1881. By the act of February 8, 1861, chapter 29, the President was authorized, at any time before the 1st day of July then next, to borrow, on the credit of the United States, a sum not exceeding twenty-five millions of dollars, to be used in the payment of the current demands upon the Treasury, and for the redemption of treasury notes outstanding, and to issue registered or coupon certificates of stock therefor, in sums not less than one thousand dollars, to be reimbursed within a period not beyond twenty years, and not less than ten years, with interest not exceeding six per cent, per an num, payable annually or semi-annually. There were issued $18,415,000, in coupon bonds of $1,000, and registered bonds of $1,000, $5,000, and $10,000, redeem able AFTER, or at any time after , the 31st day of December, 1880, with interest at six per cent, per annum, payable semi-annually, January 1 and July 1, in each year. The whole amount is still outstanding, and, notwithstand ing the language of the bonds, is payable December 31, 1880 the extreme limit of time allowed by the act. The title of the loan on the books of the Department is taken from the act of authorization, but the bonds are called CHAP. L] FIVES OF 1874. 23 in the market " SIXES OF 1881," on account of the time when they are supposed to become payable January 1, 1881. These differ from the other Sixes of 1881, which are redeem able after June 30, 1881 ; while these are payable December 31, 1880. 14. LOAN OF 1858 ; or FIVES OF 1874. The President was authorized by act of Congress approved Acts of authorize June 14, 1858, chapter 165, at any time within twelve months thereafter, to borrow, on the credit of the United States, a sum not exceeding twenty millions of dollars, pro vided no contract was to be made to prevent the United States from reimbursing the same at any time after fifteen years from the 1st day of January then next. The stock was required to be issued in certificates of not less than $1,000 each, bearing interest not exceeding five per centum per annum, payable semi-annually, with interest coupons attached. By section 6 of the act of March 3, 1859, chap ter 82, the Secretary of the Treasury was authorized to issue coupon or registered stock, as the purchaser might elect. The loan takes its title from the year of the passage of Title and desig- the act, and the bonds are designated on the face thereof nation of bonda with the words " UNITED STATES LOAN OF 1858." They are known in the market also under the name of u FIVES OF 1874," from the rate of interest and the time when they are supposed to become payable. Twenty millions of dollars of bonds were issued in denom- Amount issued. inations of $1,000, with coupons attached, and $1,000 and $5.000 registered. The language of the coupon bonds is that the " United coupon bonds. States will pay unto - - or , the sum of , at any time after the 1st day of January, 18*74. " * * " Interest will be paid thereon at the rate of five per cent, per annum from the 1st day of January,, 1859, payable semi-annually, on the 1st day of January and July of each year." * * 24 FIVES OF 1874. [CHAP. L Registered. Interest. The oldest loan. That of the registered stock is " the principal of which is redeemahle at the pleasure of the United States at any time after the expiration of fifteen years after the 1st of January, 1859, and hearing interest at the rate of five per cent, per annum, payable half yearly." The times of payment of interest are not specified in the registered stock, hut are, in fact, the same as on the coupon bonds January 1 and July 1 in each year. The whole loan is outstanding, not having yet matured, and is the oldest of all the outstanding loans of the United States not called in for redemption. CHAP. II.] DEBT CEASED TO BEAK INTEREST. 25 CHAPTER II. DEBT WHICH HAS CEASED TO BEAR INTEREST, COIN CERTIFI CATES, CERTIFICATES OF DEPOSIT, AND DEBT BEARING INTER EST IN CURRENCY. I. Debt which has ceased to bear interest. 2.. Coin certificates, or gold certificates. 3. Certificates of deposit. 4.. Three per cent, certificates. 5. Navy pension fund. 6. Certificates of indebtedness of 1870. 7. Currency sixes, or Pacific Railway bonds. 1. DEBT WHICH HAS CEASED TO BEAU INTEREST. Holders of Government securities are slow to send them Balances of oia in for redemption at maturity, even after interest has ceased loan9 - to run upon them, and balances of loans remain many years uncalled for. Of the numerous debts matured prior to the year 1837 there are still outstanding and unclaimed of the principal $57,665; and of all loans heretofore matured the amount which had not been presented for payment September 1, 1872, was $6,170,675 26. It is probable that some part of the bonds and other evi dences of these outstanding balances have been destroyed by fire, shipwreck, and otherwise; and by reason of the death of the owners, or other causes, all knowledge of the existence of the indebtedness has passed away from those who might be entitled to avail themselves of the claims. The Government sets up no statute of limitations against NO statute of iin> matured bonds, and pays those which have been destroyed, * tation - upon proof of destruction and ownership, at any period of time. Of all the bonds matured and all issues of notes and cur- NO overissues, rency called in for redemption, I am assured by those who have carefully examined the books of the Treasury Depart- 26 COIN OR GOLD CERTIFICATES. [CHAP. II. ment from its foundation, that in no case has there been redeemed or presented for payment any more than the books of the Government show to have been properly issued ; and it is to the credit of the Treasury Department, and exhibits in a most striking manner the perfection of its organization as well as the honesty, integrity, and accuracy of its officers and employes, under all administrations for a period of over seventy-five years, that, in issuing more than seven billions of dollars in securities of all kinds, including bonds, certificates, and notes, there has never been a dollar of fraudulent over-issue. 2. COIN CERTIFICATES, OR GOLD CERTIFICATES Are authorized by the following section of the act of the 3d of March, 1863, chapter 73 : SEC. 5. And be it further enacted, That the Secretary of the Treasury is hereby authorized to receive deposits of gold coin and bullion with the Treasurer or any Assistant Treas urer of the United States, in sums not less than twenty dollars, and to issue certificates therefor, in denominations of not less than twenty dollars each, corresponding with the denominations of the United States notes. The coin and bullion deposited for or representing the certificates of de posit shall be retained in the Treasury for the payment of the same on demand. And certificates representing coin in the Treasury may be issued in payment of interest on the public debt, which certificates, together with those issued for coin and bullion deposited, shall not at any tim-e exceed twenty per centum beyond the amount of coin and bullion in the Treasury ; and the certificates for coin or bullion in the Treasury shall be received at par in payment for duties on imports. Designations, de- These certificates are now designated on the face thereof nominations, &c. by the wordg c^ ERIES OF 18H," "ACT OF MARCH 3, 1863," and u GoLD CERTIFICATES;" are in denominations of 100, $500, $1,000, $5,000, and $10,000, payable at the office of the Assistant Treasurer at New York, where they are dated and countersigned by him, and are made payable to the v:iiere issued, &c. order of a payee therein named. They are all issued from CHAP. II.] CERTIFICATES OF DEPOSIT. 27 the Treasury at Washington through the Assistant Treas urer at New York, who, upon requisition, supplies them to other Assistant Treasurers and to Designated .Depositaries, to be paid out to parties desiring them in settlement of in terest on the public debt. By the present rules of the De partment they are exchangeable for coin, and redeemed in coin only by the Assistant Treasurers at New York and Boston. They are receivable for duties everywhere. Other series have been issued ; some of those of 1870 were on eerie* designated " GOLD NOTES," and an earlier series still had the denomination of $20 ; but as these certificates are never reissued when once redeemed by the Treasurer at Wash ington, all except those of the series of 1871 will soon dis appear from circulation. When indorsed in blank these certificates pass by delivery, and to some extent form a circulating medium of gold notes, especially in New York city, where the large gold transac tions in the payment of duties and other business render them of great convenience. The amount that may be issued is limited only by the Limit of tseuea wants and ability of the business community and the re quirement of law that they shall not at any time exceed twenty per cent, beyond the amount of coin and bullion in the Treasury. , 3. CEKTIFICATES OF DEPOSIT Are issued according to the provisions of the following act of Congress, of June 8, 1872, chapter 346: AN ACT FOR THE BETTER SECURITY OF BANK RESERVES, AND TO FACILITATE BANK CLEARING-HOUSE EXCHANGES. Be it enacted by tlie Senate and House of Representatives of the United States of America in Congress assembled, That Won-, the Secretary of the Treasury is hereby authorized to receive United States notes on deposit, without interest, from na tional banking associations, in sums not less than ten thou* sand dollars, and to issue certificates therefor in such form as the Secretary may prescribe^ in denominations of not less than five thousand dollars ; which certificate shall be pay* 28 TEMPORARY LOAN CERTIFICATES. [CHAP. II. able on demand in United States notes at the place where the deposits were made. SEC. 2. That the United States notes so deposited in the Treasury of the United States shall not be counted as part of the legal reserve ; but the certificates issued therefor may be held and counted by national banks as part of their legal reserve, and may be accepted in the settlement of clearing house balances at the places where the deposits therefor were made. SEC. 3. That nothing contained in this act shall be con strued to authorize any expansion or contraction of the currency ; and the United States notes for which such cer tificates are issued, or other United States notes of like amount, shall be held as special deposits in the Treasury, and used only for the redemption of such certificates. Approved June 8, 1872. Designation, &<\ The certificates are designated on the face thereof with the words " CERTIFICATE OF DEPOSIT/ " UNITED STATES NOTES," and u AcT OP JUNE 8, 1872, chapter 346," are in denomi nations of $5,000 and $10,000, are signed by the Treasurer and Register of the Treasury and countersigned by the Assistant Treasurer by whom they are issued, and are made payable to the order of a payee therein named, in United States notes, on demand, at the office of the Assist ant Treasurer where they -are countersigned and dated. 4. THREE PER CENT. CERTIFICATES ; or TEMPORARY LOAN CERTIFICATES. Law <ff authorize The act of March 2, 1867, (chapter 194,) for the purpose of redeeming and retiring any compound-interest notes out standing, directed the Secretary of the Treasury to issue temporary loan certificates, bearing interest at a rate not exceeding three per cent, per annum ; the principal and interest payable in lawful money on demand, and provided that they might be held by any national bank as a part of its reserve required by law, to the extent of three-fifths of Biich reserve. The amount to be issued was by that act CHAP. II.] NAVY PENSION FUND. 29 limited to fifty millions of dollars, and was extended to seventy-five millions of dollars by the act of July 25, 1868. The whole amount actually issued has been about eighty- four millions of dollars, but not over seventy-five millions at any one time. They are all, or nearly all, held by the banks, and the interest has been paid upon them semi- annually. From the commencement of issuing these certificates in Gradual rede:i> payment of compound-interest notes they have been can celed as fast as redeemed by the Treasury Department, and never reissued. The amount outstanding was gradually reduced, by being presented for payment from time to time, whenever legal-tender notes were needed by the holders, until it was less than forty-six millions of dollars on the 12th of July, 1870. At that date Congress passed an act authorizing the increase of national bank circulation to the extent of fifty-four millions of dollars, and requiring the redemption of these certificates monthly to the amount of the issue of new bank circulation during the preceding months, as reported to the Secretary by the Comptroller of the Currency. Under the operation of this requirement the three per cent, certificates -are being called in for pay ment, and will soon disappear from the reports of the out standing debt, except such as may remain unclaimed after interest thereon has ceased to run. 5. NAVY PENSION FUND. This fund arises from the money accruing to the United origin and object States from the capture of prizes authorized by law, and is oi the fund, set apart for the payment of pensions to the officers, seamen, and marines who may be entitled to receive the same, and if the fund is insufficient for that purpose, the public faith is pledged to make up the deficiency. It is established and managed under the following laws: Act of April 23, 1800, chapter 33, sections 9 and 10, (a sub stitute for act of March 2, 1*799, chapter 24;) act of March 26, 1804, chapter 48; act of April 16, 1816, chapter 56; 30 CERTIFICATES OF INDEBTEDNESS. [CHAP. II. resolution of July 1, 1864, chapter 62 ; act of July 23, 1868, chapter 229, section 2; and act of July 20, 1868; and there are many acts authorizing payment therefrom. The fund amounts to fourteen millions of dollars, for which no honds have been issued, and of which no evidence of indebtedness exists, except what appears in the laws of Congress and the books of the Treasury Department. It would hardly be called a debt, were it not included in the monthly debt statement of the Department; and since the passage of the act of July 23, 1868, providing that the interest on the fund shall be at the rate of three per cent, per annum, in lawful money, and applicable exclusively to the payment of navy pensions, it amounts simply to a per manent appropriation of four hundred and twenty thousand dollars a year to the payment of navy pensions. 6. CERTIFICATES OF INDEBTEDNESS OF 18*70. .< Law authorizing The act of July 8, 18*70, chapter 229, authorized the issue 1S8UB of certificates of indebtedness of the denomination of $1,000 each, to the amount of $6*78,362 41, payable in lawful money of the United States in five years, with interest semi-annu- ally at the rate of four per cent, per annum, two-thirds to the State of Massachusetts, and one-third to the State of Maine, for the use of the European and North American Railway Company of Maine, to aid said company in con structing its line of railway ; each of said States having assigned its interest therein to said railway company. These bonds were, by the act, to be in "full adjustment and pay ment for and on account of any matters arising from any money expended by said State of Massachusetts on account of the war with Great Britain in 1812 to 1815, or any inter est thereon, or on account of any matters arising out of or accruing from the treaty with Great Britain, known as the treaty of Washington, or for or on account of any other matters which have been assigned by said States of Massa chusetts and Maine to said railway company." Amount issued. There were issued 678 certificates of $1,000 each, pay- CHAP. II.] PACIFIC RAILWAY BONDS. 31 able to the Treasurer of the State of Maine or bearer, in five years from September 1, 1870, with semi-annual interest coupons of twenty dollars each attached, both pay able in lawful money. The coupons are payable March 1 when payable, and September 1. These certificates are all outstanding, and will become payable September 1, 1875. For the bal ance, $362 11, one other certificate was issued, and has since been paid and canceled. CURRENCY SIXES; or PACIFIC RAILWAY BONDS. Title, den -railna- These bonds are commonly known as " CURRENCY SIXES, tions, designs- lions, c. because they bear six per cent, interest, and are the only bonds of the United States payable, principal and interest, in lawful money. On the public debt statement and the books of the Treasury Department they are called " PACIFIC RAILWAY BONDS," on account of their having been issued to certain Pacific railroads in the nature of a loan, underacts of Congress to aid in the construction of their roads. They are all registered, in denominations of $1,000, $5, 000, and 10,000; are payable in lawful money on a day therein named, which is at the expiration of thirty years from the date of original issue, with interest at six per cent, per an num, payable semi-annually, on the 1st days of January and July in each year, in lawful money ; and are designated with the words " [NAME OF COMPANY] RAILROAD COMPANY," "PAYABLE THIRTY YEARS FROM DATE," and "Act of July 1st, 1862, Act of July 2d, 1864." The name of a railroad company is thus printed on the bonds merely to indicate to which company they were issued, united states They are the bonds of the United States, containing the absolute unconditional promise of the national Govern ment, and the Government alone is responsible for the pay ment of both principal and interest. The railroad companies 32 PACIFIC RAILWAY BONDS. [CHAP. IL Ponds issued. Grants hy United States. are under no obligations to the holders of the bonds, but only to repay the United States, in the manner set forth in the acts of Congress. THE FOLLOWING TABLE EXHIBITS THE NAMES OF THE COMPANIES TO WHICH THE BONDS WEKE ISSUED, THE AMOUNT," DATE OF ISSUE, AND TIMES OF BECOMING PAYABLE. Names of companies to which the bonds were issued. Amount is sued. Date of issue. Payable. Central Pacific $2 362 000 Jan y 16 18G5 Jan y 16 1895, 1 GOO 000 Jan y 1 1866. Jan y 1 1896. :::::::::::::::::::: 2,112,000 10,614,120 9 197 GOO Jan y 1, 1867. Jan y 1, 1868. Jan y 1, 1869. Jan y 1, 1897. Jan y 1, 1898. Jan y 1, 1899. Un on Pacific 4 320 000 Feb y 1 1866 Feb y 1 1896 3 840 000 Jan y 1 1867 Jan y 1, 1897 , 15 919 512 Jan y 1, 1868 Jan y 1 1898 3 157000 Jan y 1 1869 Jan y 1 1899 Central Branch Union Pacific, late Atchison and Pike s Peak 640 000 Jan v 1 1866 Jan y 1 1896. 640 000 Jan / 1 1867 Jan y 1 1897. Kansas, late Union Pacific, Eastern Division 320,000 640,000 Jan y 1, 1868. Nov r 1, 1865 Jan y 1, 1898. Nov r 1, 1895. 1 440 000 Jan y 1 1866 Jan y 1 1896 <i 2 800 000 Jan y 1 1867 Jan y 1 1897 ,. u 1 423 000 Jan y 1 1868 Jan y 1 1898 Western Pacific 320 000 Jan y 1 1867 Jan y 1 1897 1 650 560 Jan y 1 1869 Jan y 1 1899 Sionx City and Pacific 1 628 320 Jan y 1 1868 Jan y 1 1898 Security for re payment of bonds. Interest payable January 1 and July 1. These bonds were issued under the act of July 1, 1862, chapter 120, and the act of July 2, 1864, chapter 216, as amended by some subsequent provisions. A right of way and certain public lands were thereby granted to the railroad companies, and provisions made re quiring trje Secretary of the Treasury to issue the bonds above mentioned to said companies, upon completing sec tions of their road, at the rate of sixteen thousand dollars per mile, except for certain parts more difficult of construc tion, for which they were to be issued at the rate respectively of thirty-two thousand and forty-eight thousand dollars per mile. The security of the United States rests upon the following provisions of law: CHAP. II.] PACIFIC RAILWAY BONDS. ACT OF JULY 2, 1862, CHAPTER 120. SEC. 5. * * * and to secure the repayment to the United States, as hereinafter provided, of the amount of said bonds so issued and delivered to said company, together with all interest thereon which shall have been paid by the United States, the issue of said bonds and delivery to the company shall ipso facto constitute a first mortgage on the whole line of the railroad and telegraph, together with the rolling stock, fixtures, and property of every kind and de scription, and in consideration of which said bonds may be issued ; And on the refusal or failure of the said company to re deem said bonds, or any part of them, when required so to do by the Secretary of the Treasury, in accordance with the provisions of this act, the said road, with all the rights,, functions, immunities, and appurtenances thereunto belong ing, and also all lands granted to the said company by the United States, which, at the time of said default, shall re main in the ownership of said company, may be taken pos session of by the Secretary of the Treasury, for the use and benefit of the United States: Provided, This section shall not apply to that part of any road now constructed. SEC. 6. And be it further enacted. That the grants afore said are made upon condition, that said company shall pay said bonds at maturity, and shall keep said railroad and telegraph line in repair and use, and shall at all times transmit dispatches over said telegraph line, and transport mails, troops, and munitions of war, supplies, and public stores upon said railroad for the Government, whenever re quired to do so by any department thereof, and that the Government shall at all times have the preference in the use of the same for all the purposes aforesaid, (at fair and reasonable rates of compensation, not to exceed the amounts paid by private parties for the same kind of service ;) And all compensation for services rendered for the Gov ernment shall be applied to the payment of said bonds and interest until the whole amount is fully paid. Said company may also pay the United States, wholly or in part, in the same or other bonds, treasury notes, or other evidences of debt against the United States, to be allowed at par ; And after said road is completed, until said bonds and interest are paid, at least five per centum of the net earn ings of said road shall also be annually applied to the pay ment thereof. Mortgage. Road, &c., to-be forfeited on fail ure of company to redeem bonds.. Grants on condi tion that compa nies shall pay bonds at rnati> J ritv. Compensation for services to U. S. to be retained. Companies may pay in treasury notes, bonds, &c. after ooruptp- tionofroadsSper cent, of net earn ings to be applied to payment of bonds. The lien of the United States is made subordinate to a Government u 3 4 PACIFIC RAILWAY BONDS. [CHAP. II 1.1 mortgage to first mortgage authorized by the provisions of the act of SE 10> ^^ &e ^ f urtlier enacted, That section five of said act be so modified and amended, that the Union Pacific Railroad Company, the Central Pacific Railroad Company, and any other company authorized to participate in the construction of said road, may, on the completion of each section of said road, as provided in this act and the act of which this is an amendment, issue their first mortgage bonds on their respective railroads and telegraph lines, to an amount not exceeding the amount of the bonds of the United States,, and of even tenor and date, time of maturity, rate and character of interest with the bonds authorized to be issued to said railroads respectively. And the lien of the United States bonds shall be subordi nate to that of the bonds of any or either of said companies hereby authorized to be issued on their respective roads, property, and equipments, except as to the provisions of the sixth section of the act to which this act is an amendment, relating to the transmission of dispatches and the trans portation of mails, troops, munitions of war, supplies, and public stores for the Government of the United States. Section 5, chapter 216, act of July 2, 1864, provides only hair of com. That only one half of the compensation for services ren- ensation for ser- (Jered for the Government by said companies shall be required to be applied to the payment of the bonds issued by the Government in aid of the construction of said road. And the act of March 3, 1871, chapter 116 SEC. 9. That, in accordance with the fifth section of the act approved July two, eighteen hundred and sixty-four, entitled "An act to amend an act entitled An act to aid in the construction of a railroad and telegraph line from the Missouri river to the Pacific ocean, and to secure to the Government the use of the same for postal, military, and other purposes, approved July first, eighteen hundred and sixty-two," the Secretary of the Treasury is hereby directed to pay over in money to the Pacific Railroad Companies mentioned in said act,, and performing services for the United States, one-half of the compensation at the rate pro vided by law for such services, heretofore or hereafter ren dered: Provided, That this section shall not be construed to affect the legal rights of the Government or the obliga tions of the companies, except as herein specifically pro vided. vices to U.S. to be retained. Balance to bo paid to com- CHAP, III.] UNITED STATES NOTES. CHAPTER III. UNITED STATES NOTES AND FRACTIONAL CURRENCY; DISTINCT-. IVE PAPER 5 EXCHANGE OF MUTILATED AND DEFACED NOTES, ETC. 1. United States notes. 2. Old demand notes. 3. Fractional currency. <j.. Distinctive paper for notes, bonds, &c. 5. Regulations and instructions for re demption of mutilated and deface.! currency. Acts of authnriza tion. 1. UNITED STATES NOTES, Commonly called " LEGAL-TENDER NOTES," from being made by law a legal tender for debts ; and " GREENBACKS," from the green color in which the backs have always been printed. They are issued under the following provisions of law : ACT OF FEBRUARY 25, 18G2, CHAPTR 33, SECTION 1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury is hereby authorized First:let - to issue, on the credit of the United States, one hundred and fifty millions of dollars of United States notes, riot bearing interest, payable to bearer, at the Treasury of the United States and of such denominations as he may deem expedient, not less than five dollars each : Provided, hoivever, That fifty millions of said notes shall be in lieu of the demand treasury notes authorized to be issued by the act of July seventeen, eighteen hundred and sixty-one; which said demand notes shall be taken up as rapidly as practicable, and the notes herein provided for substituted for them : And provided, further, That the amount of the two kinds of notes together shall at no time exceed the sum of one hundred and fifty millions of dollars ; And such notes herein authorized shall be receivable in payment of all taxes, internal duties, excises, debts, and demands of every kind due to the United States, except duties on imports, and of all claims and demands against 36 UNITED STATES NOTES. [CHAP. Ill the United States of every kind whatsoever, except for in terest upon bonds and notes, which shall be paid in coin, and shall also be lawful money and a legal tender in pay ment of all debts, public and private, within the United States, except duties on imports and interest as aforesaid. And any holders of said United States notes, depositing any sum not less than fifty dollars or some multiple of fifty dollars, with the Treasurer of the United States, or either of the Assistant Treasurers, shall receive in exchange there for duplicate certificates of deposit, one of which may be transmitted to the Secretary of the Treasury, who shall thereupon issue to the holder an equal amount of bonds of the United States, coupon or registered, as may by said holder be desired, bearing interest at the rate of six per centum per annum, payable semi-annual ly, and redeemable at the pleasure of the United States after five years, and payable twenty years from the date thereof. And such United States notes shall be received the same as coin, at their par value, in payment for any loans that may be hereafter sold or negotiated by the Secretary of the Treasury, and may be reissued from time to time, as the exigencies of the public interest shall require. ACT OF JULY 11, 1862, CHAPTER 142. i act Be it enacted ly the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury is hereby authorized to issue, in addition to the amounts heretofore authorized, on the credit of the United States, one hundred and fifty millions of dollars of United States notes, not bearing inter est, payable to bearer, at the Treasury of the United States, and of such denominations as he may deem expedient : Provided, That no note shall be issued for the fractional part of a dollar, and not more than thirty-five millions shall be of lower denominations than five dollars. And such notes shall be receivable in payment of all loans made to the United States, and of all taxes,, internal duties, excises, debts, and demands of every kind due to the United States, except duties on imports and interest, and of all claims and demands against the United States, except for interest upon bonds, notes, and certificates of debt or de posit; and shall also be lawful money and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest, as aforesaid. And any holder of said United States notes, depositing any sum not less than fifty dollars, or some multiple of CHAP. III.] UNITED STATES NOTES. 37 fifty dollars, with the Treasurer of the United States, or either of the Assistant Treasurers, shall receive in exchange therefor duplicate certificates of deposit, one of which may be transmitted to the Secretary of the Treasury, who shall thereupon issue to the holder an equal amount of bonds of the United States, coupon or registered, as may by said holder he desired, hearing interest at the rate of six per centum per annum, payable semi-annually, and redeemable at the pleasure of the United States after five years, and payable twenty years from the date thereof: Provided, however, That any notes issued under this act may be paid in coin, instead of being received in exchange for certificates of deposit as above specified, at the direction of the Secretary of the Treasury. And the Secretary of the Treasury may exchange for such notes., on such terms as he shall think most beneficial to the public interest, any bonds of the United States bearing six }>* wntum interest, and redeemable after five and payable in twenty years, which have been or may be lawfully issued under the provisions of any existing act; May reissue the notes so received in exchange; may re ceive and cancel any notes heretofore lawfully issued under any act of Congress, and in lieu thereof issue an equal amount in notes such as are authorized by this act; ******* SEC. 3. ****** And of the amounts of United States notes authorized by this act, not less than fifty millions of dollars shall be re served for the purpose of securing prompt payment of such deposits, [temporary loan deposits authorized by the same act^\ when demanded, and shall be issued and used only when, in the judgment of the Secretary of the Treasury, the same or any part thereof may be needed for that purpose. * * ACT OP MARCH 3, 1S63, CHAPTER 73. ******* SEC. 3. And be it farther enacted, That the Secretary of Third *& the Treasury be, and he is hereby, authorized, if required by the exigencies of the public service, for the payment of the army and navy, arid other creditors of the Government, to issue, on the credit of the United States, the sum of one hundred and fifty millions of dollars of United States notes, including the amount of such notes heretofore authorized by the joint resolution approved January seventeen, eighteen hundred and sixty-three, in such form as lie may deem ex pedient, not bearing interest, payable to bearer, and of su.cn denominations, not less than one dollar, as he may prescribe, 33 UNITED STATES NOTES. [CHAP. III. which notes so issued shall be lawful money and a legal tender in payment of all debts, public and private, within the United States, except for duties on imports and interest on the public debt ; and any of the said notes, when returned to the Treasury, may be reissued from time to time as the exigencies of the public service may require. And in lieu of any of said notes, or any other United States notes, returned to the Treasury and canceled or destroyed, there may be issued equal amounts of United States notes, such as are authorized by this act. ;): * if * * * * And the holders of United States notes, issued under and by virtue of said acts, [of February 25 and July 11, 1862,] shall present the same for the purpose of exchanging the same for bonds, as therein provided., on or before the 1st day of July, eighteen hundred and sixty-three, and there after the right so to exchange the same shall cease and determine. The joint resolution referred to in the above act only authorized the issue of one hundred millions of dollars of notes in advance of the passage of that act then pending before Congress. Limit of issue. These three acts together authorize the issue of four hun dred and fifty millions of dollars ; but the construction given by the Treasury Department is that the fifty millions re quired by the act of July 11, 1862, (see page 37,) to be reserved for the payment of temporary deposits and used only when, in the judgment of the Secretary, the same, or any part thereof, might be necessary for that purpose, were intended by Congress to be a temporary issue, and when once withdrawn, by the reduction of the whole to four hun dred millions, not to be reissued. This construction is sus tained by the Supreme Court in the case of " The Banks v. The Supervisors, (7 Wallace, 26.) The Chief Justice, who was Secretary of the Treasury at the time of the passage of the acts, therein says: "The act of February 25, 1862, pro vided for the issue of these notes to the amount of one hun dred and fifty millions of dollars. The act of July 11, 1862, added another hundred and fifty millions of dollars to the circulation, reserving, however, fifty millions for the re demption of temporary loan, to be issued and used only when necessary for that purpose. Under the act of March CHAP. III.] UNITED STATES NOTES. 39 3, 1863, another issue of one hundred and fifty millions \vas authorized, making the whole amount authorized four hun dred and fifty millions, and contemplating a permanent circulation, until resumption of payment in coin, of four hundred millions of dollars." The same view was again expressed by the Chief Justice, in Veazie Bank v. Fenno, (8 Wallace, 537.) The amount in actual circulation, including demand notes, Highest amount reached its highest point about August 31, 1865, when it RpducMoM ^- c - was $433,160,569. At the time of the proclamation of the President, April 2, 1866, declaring the rebellion ended in certain States therein named, it was 422,749,252. It was first reduced below four hundred millions of dollars Sep tember 1, 1866, near the time of the President s proclama tion of August 20, 1866, declaring the insurrection at an end throughout the whole of the United States, when it was $399,603,592, and has never been so high since that date. Congress passed the act of April 12, 1866, (chapter 39,) Limiting reduc- providing "that of United States notes not more than ten tlon millions of dollars may be retired and canceled within six months from the passage of this act, and thereafter not more than four millions of dollars in any one month," and the Secretary of the Treasury thereafter continued to reduce the amount in circulation. Afterwards Congress passed the following act, which suspending fur- became a law without the approval of the President on therreduction - the 4th of February, 1868: AN ACT TO SUSPEND FURTHER REDUCTION OF THE CURRENCY. Be it enacted ly the Senate and House of Representatives of the United States of America in Congress assembled, That from and after the passage of this act, the authority of the Secretary of the Treasury to make any reduction of the cur rency, by retiring or canceling United States notes, shall be. and is hereby, suspended ; but nothing herein contained shall prevent the cancellation and destruction of mutilated United States notes, and the replacing the same with notes Df the same character and amount. At this time the amount outstanding was three hundred 40 UNITED STATES NOTES. [CHAP, in, The reserve of forty-four mil lions of notes. Redemption of notes in coin. and fifty-six millions of dollars, and that is the limit below which the circulation of United States notes cannot be re duced without congressional enactment. Between that amount and the four hundred millions authorized by law, the issue of the reserve of forty-foil r millions of dollars is left to the discretion of the Secretary of the Treasury, who has temporarily issued portions of it on the following and other occasions of pressing necessity: During the month of September, 1869, about a million and a half of dollars of the three per cent, demand certifi cates came in suddenly for redemption, arid were paid out of this reserve; but the amount so withdrawn was again re stored thereto within two weeks ; In the great Chicago fire of 1871 about a million and a half of dollars in notes were burned and entirely destroyed in the office of the depositary at that place, and the Sec retary increased the apparent circulation by that amount from the reserve, until, by the seventh section of the act of June 10, 1872, chapter 415, Congress authorized the ac counting officers to allow a credit of the burned notes in the accounts of the depositary and in the books of the Department when the amount was restored to the re serve. The obligation of the Government to finally redeem all these notes in coin is expressed in the following language of the Chief Justice of the Supreme Court, in the case of The Bank v. The Supervisors, (7 Wallace, 29,) already re ferred to : " Under the exigencies of the times it seems to have been thought inexpedient to attempt any provision for the re demption of the United States notes in coin. "The law-, therefore, directed that they should be made payable to bearer at the Treasury of the United States, but did not provide for payment on demand. The period of pay ment was left to be determined by the public exigencies. * * Every one of them expresses upon its face an engagement of the nation to pay the bearer a certain sum. The dollar note is an engagement to pay a dollar, and the dollar in tended is the coined dollar of the United States ; a certain quantity in weight and fineness of gold or silver, authenti cated as such by the stamp of the Government. ISTo other CHAP. Ill] UNITED STATES NOTES. 4] dollars had before been recognized by the legislation of the national Government as lawful money." Until the year 1870 it was a mooted question whether constitutionality the provisions of law making United States notes a legal provfsVnT 1 " tender for debts public and private were constitutional or not. Their constitutionality was sustained by the decisions of several State courts of different States ; but, as to debts contracted before the passage of the laws, it was, in 1869, held otherwise by the Supreme Court of the United States, in Hepburn v. Griswold, (8 Wallace, 603.) At that time two vacancies existed on the bench of that court, and the decis ion was not regarded throughout the country as conclusive upon the point raised. The question was again, in 1870, brought before the fall court, consisting of nine judges, in the two cases of Knox v. Lee and Parker v. Davis, (12 Wal lace, 457,) heard together, was elaborately argued, and the constitutionality of the law fully sustained by a majority of the court four judges dissenting. Mr. Justice Strong, in delivering the opinion of the court, -finally Ketut-d. says: "It will be seen that we hold the acts of Congress constitutional as applied to contracts made either before or after their passage. In so holding, we overrule so much of what was decided in Hepburn v. Griswold as ruled the acts unwarranted by the constitution so far as they apply to contracts made before their enactment. That case was de cided by a divided court, and by a court having a less num ber of judges than the law then in existence provided this court shall have. These cases have been heard before a full court, and they have received our most careful consideration." It may therefore be considered as finally settled, by the authoritative decision of the court of last resort, the Supreme Court of the United States, that the legal-tender acts, as they are commonly called, making United States notes a legal tender for debts, public and private, are constitutional and valid. As to what are "debts " within the meaning of the legal- For what debt* tender acts, and what debts may or may not be discharged Unitedstates J noten are not 10- by a tender of United States notes, there has been some con- gai tenders. flict of authorities in the different courts, the State courts UNITED STATES NOTES. [CHAP. III. Different Issues. Exchangeable for bonds. generally going further than the Supreme Court of the Uni ted States in sustaining the application of the law. The following principles may be taken as now well established : United States notes are not a legal tender for taxes im posed under State authority, unless made so by the laws of the State, {Lane v. Oregon, 7 Wallace, 71 ;) nor in payment of a promissory note expressly payable by its terms in coin, (Villiac v.Biven, 28 Col., 410;) nor in discharge of a bond to pay a certain sum in gold and silver coin, (Bronson v. Bodes, 7 Wallace, 229;) nor in payment of the annual rent reserved by a lease made in 1791 in the words, " Fifteen pounds current money of Maryland, payable in English golden guineas, weighing five pennyweights and six grains, at thirty-five shillings each, and other gold and silver at their present established weight and rate, according to act of Assembly," (Butler v.Homvitz, 7 Wallace, 258;) nor in discharge of any contract made payable in specie or in com modities or obligations of any kind, but only for debts which are payable in money generally, (Trebilcock v. Wil son et ux., 12 Wallace, 687 ;) nor in satisfaction of an award against the United States, made payable in coin by the terms of the award, (Tyers v. United States, 5 Court of Claims Beports, 509.) Under the three acts authorizing the issue of legal-tender notes, four different issues have been made. The first two differed from each other only slightly in the style and lan guage of the notes. Those .of the first were dated March 10, 1862, and bore on the face the words, " Act of Febru ary 25th, 1862." Those of the second were dated August 1, 1862, and bore on the face the words, "Act of July 11, 1862;" of this issue there were notes of the denominations of one dollar and two dollars, which were prohibited by the first, but allowed by the second act. All these notes, of both issues, had printed upon the backs thereof the declaration contained in the laws author izing them, that they were " exchangeable for United States six per cent, twenty-year bonds, redeemable at the pleasure of the United States after five years." This right to ex change notes for five-twenty bonds was, by the third section ua*>.. III.J UNITED STATES NOTES. 43 of the act of March 3, 1863, chapter 73, limited to July 1, 1863, after which it ceased and determined. (See page 38.) The next issue was under the act of 1863. The notes Next issue, were dated March 10, 1863, bore on the face thereof the words, " Act of March 3d, 1863," and on the back, like those of the former issues, the words. "This note is a legal tender for all debts public and private, except duties on imports and interest on the public debt," but omitted the declara tion that they were exchangeable for five- twenty bonds. In other respects they did not much differ from the earlier printed notes. The latest issue is that of the series of 1869, now most Latest issue, in circulation. All others are being redeemed as rapidly as possible, and are never reissued when once paid into the Treasury. Each note of this series has upon its face the words, " March 3d, 1863, " and, unlike those of any other issue, the words, fk TREASURY NOTE," and, except the $1,000 note, "Series of 1869." They differ from the others also in general style, in the details of engraving, in the tinting, and otherwise, besides being printed on the distinctive pa per designated by the Secretary of the Treasury, and made under the supervision of the Treasury Department. 2. OLD DEMAND NOTES. The act of July IT, 1861, chapter 5, authorized the issue Laws relating to, of treasury notes, of denominations less than $50 and not less than $10, not bearing interest, payable on demand by the Assistant Treasurers of the United States at Phila delphia, New York, and Boston, not exceeding fifty millions in all. By section six the authority to issue and reissue these notes was limited, to cease and determine December 31, 1862. The amount to be issued was increased to sixty millions of dollars by the act of February 12, 1862. The act of August 5, 1861, permitted notes to be in denomina tions not less than $5, added the assistant treasury at Saint Louis and the depository at Cincinnati as places of redemp tion, and provided that the notes should be "receivable in 44 FRACTIONAL CURRENCY. [CHAP. III. Descriptioo of n otes. Payable on de mand in gold. payment of all public dues." The act of March 17, 1862, chapte * 45, further provided, that in addition to being receiv able in payment of duties on imports, they should be receiv able, and should be lawful money and a legal tender, in like manner and for the same purposes and to the same extent, as the notes authorized by the act of February 25, 1862. Sixty millions of dollars of these notes were issued, but none have been reissued since December 31, 1862; and all that are received into the Treasury are canceled and destroyed. Less than a hundred thousand dollars remain outstand ing, and these, or all that are in existence, will soon be redeemed. They were dated August 10, 1861, were made payable on demand by the Assistant Treasurer at New York, and were stamped on the face with the words, "Aci or JULY 17th, 1861," and " RECEIVABLE IN PAYMENT OF ALL PUBLIC DUES." These are the notes referred to in the law establishing the sinking fund, act of February 25, 1862, chapter 33, section 5, as receivable in payment of duties on imports, and are the only notes issued during the Rebellion, or since its close, payable on demand and receivable for duties. They are treated as gold notes, and are redeemed in coin whenever presented for payment. Origin of frac tional currency. Acts of authoriza tion. 3. FRACTIONAL CURRENCY. The suspension of specie payments by the banks in De cember, 1861, was followed by the withdrawal of specie, gold, silver, and even copper coinage, from circulation, and the difficulties of making payments of small sums became so great, that the people were driven to the necessity of using postage stamps, revenue stamps, and the checks and memoranda of individuals and corporations, issued for that purpose, as a circulating medium for small change. In order to afford relief to the public from this great in convenience, Congress passed the following acts, which are still in force, and under which the fractional currency ia now issued : CHAP. III.] FRACTIONAL CURRENCY. 45 ACT OF JULY 17, 1862, CHAPTER 196 &N ACT TO AUTHORIZE PAYMENTS IX STAMPS, AND TO PROHIBIT CIRCULATION OF NOTES OF LESS DENOMINATION THAN ONE DOLLAPv. Be it enacted ~by the Senate and House of Representatives :f the United States of America in Congress assembled, That the Secretary of the Treasury be, and he is hereby, First act. directed to furnish to the Assistant Treasurers, and such designated depositaries of the United States as may be by him selected, in such sums as lie may deem expedient, the postage and other stamps of the United States, to be ex changed by them, on application, for United States notes; and from and after the 1st clay of August next such stamps shall be receivable in payment of all dues to the United States less than five dollars, and shall be received in ex change for United States notes when presented to any Assistant Treasurer or any designated depositary selected as aforesaid in sums not less than five dollars. SEC. 2. And be it further enacted, That from and after the first day of August, eighteen Penalty for circu- hundred and sixty-two, no private corporation, banking iating,&c., other association, firm, or individual shall make, issue, circulate,, rencv or pay any note, check, memorandum, token, or other obli gation, for a less sum than one dollar, intended to circulate as money or to be received or used in lieu of lawful money of the United States; and every person so offending shall, on conviction thereof in any district or circuit court of the United States, be punished by fine not exceeding five hun dred dollars, or by imprisonment not exceeding six months, or by both, at the option of the court. Approved July 17, 1862. ACT OF MARCH 3, 1863, CHAPTER 73. SEC. 4. And be it further enacted, That in lieu of postage second act and revenue stamps for fractional currency, and of fractional notes,, commonly called postage currenc}", issued or to be issued, the Secretary of the Treasury may issue fractional notes of like amounts, in such form as he may deem expe dient, and may provide for the engraving, preparation, and issue thereof in the Treasury Department building. And all such notes issued shall be exchangeable by the Assistant Treasurers and designated depositaries for United States notes, in sums not less than three dollars, and shall be re ceivable for postage and revenue stamps, and also in pay ment of any clues to the United States less than five dollars, except duties on imports, and shall be redeemed on present ation at the Treasury of the United States in such sums FRACTIONAL CURRENCY. [CHAP. HI. Limited to fifty millions dollars Third act Whole amoiint not to exceed fifty millions of dollars. Postage cur rency. and under such regulations as the Secretary of the Treasury shall prescribe : Provided, That the whole amount of frac tional currency issued, including postage and revenue stamps issued as currency, shall not exceed fifty millions of dollars. ACT OF JUNE 30, 1864, CHAPTER 172. SEC. 5. And be it further enacted, That the Secretary of the Treasury may issue notes of the fractions of a dollar as now used for currency, in such form, with such inscriptions, and with such safeguards against counterfeiting, as he may judge best, and provide for the engraving and preparation, and for the issue of the same, as well as of all other notes and bonds and other obligations, and shall make such regula tions for the redemption of said fractional notes and other notes when mutilated or defaced, and for the receipt of said fractional notes in payment of debts to the United States, except for customs, in such sums, not over five dollars, as may appear to him expedient; and it is hereby declared that all laws and parts of laws applicable to the fractional notes engraved and issued as herein authorized apply equally and with like force to all the fractional notes here tofore authorized, whether known as postage currency or otherwise, and to postage stamps issued as currency; but the whole amount of all descriptions of notes or stamps less than one dollar issued as currency shall not exceed fifty millions of dollars. On the 21st of August, 1862, the Treasury Department began to issue the first notes of denominations less than $1, under the act of July 17 of that year. They bore upon the face thereof the words " POSTAGE CURRENCY," and "Receiv- able for postage stamps at any post office," with fac similes of the designs of postage stamps. The 5-cent note had the print of a five-cent postage stamp, and the 10-cent note a ten-cent postage stamp. The 25-cent note had five five- cent postage stamps, and the 50-cent note five ten-cent postage stamps. This currency was used during the most excited and disturbed times of the Rebellion, and much of it was undoubtedly destroyed in the hands of holders, and will never come in for redemption. None of it has been reissued for many years, and the Department has made great efforts to withdraw it from circulation ; but there are more than four millions of dollars still outstanding a much larger amount than of either of the next two issues. CHAP. III.] FRACTIONAL CURRENCY. 4 *J Since the passage of the acts of March 3, 1863, and June Fractional cnr* 30, 1864, several other issues or series have "been made and designated " FRACTIONAL CURRENCY," the notes differ ing from those of all former issues in color, design, and paper. The denominations which have been issued are 3 cents, Denominations. Scents, 10 cents, 15 cents, 25 cents, and 50 cents. The "postage currency" had no 3-cent note, that denomination being first introduced under the act of 1863. The act of March 3, 1865, chapter 100, section 3, prohibited the issue of fractional notes of a less denomination than five cents, and required those outstanding to be redeemed and can celed. The act of May 6, 1866, chapter 81, section 3, pro- Printed on dis- hibited the issue of fractional notes of a less denomination than ten cents, and required those outstanding to be retained when paid into the Treasury and canceled. The 3-cent and 5-cent notes have ceased to be printed, and those paid in have not been reissued since the passage of those acts. The 15-cent note was introduced in 1869, and belongs to the now latest series. The new fractional currency now issued is pointed on the distinctive paper made expressly for the Department^ and differs also from all former issues in the size, color, style, and details of the engraving. "The notes for parts of a dollar were never declared to Notaiegai ten- be lawful money or a legal tender." Lane County v. Oregon, changeable for ("7 Wallace, 75.) But they are "exchangeable for United notes, and recciv States notes in sums not less than three dollars, and receiv- able in payment of all dues to the United States less than five dollars, except customs," by the terms of the laws arid the language of the notes. Within the fifty millions of dollars limited by each of the Amount kept i acts of 1863 and 1864, the amount kept in circulation is de- circulation - termined wholly by the wants and demands of the public, who, it appears, require fractional currency in the propor tion of about one dollar to each inhabitant of the country. The amount in circulation rarely goes above that proportion, making proper allowance for lost and destroyed notes, and when it falls much below, a scarcity is sensibly felt through out the country. Pcnnl offense to have in one s possession, &c., tho distinctive paper used for printing notes. 48 DISTINCTIVE PAPER. [CHAP. Ill 4. DISTINCTIVE PAPER FOR NOTES, BONDS, &c. The act of June 30, 1864, chapter 172, section 11, makes it a penal offense for an} 7 person to "have or retain in his custody or possession, after a distinctive paper shall have been adopted by the Secretary of the Treasury for obliga tions and other securities of the United States, any similar paper adapted to the making of any such obligation or other security," without authority. All United States notes, fractional currency, and bonds of the funded loan and other obligations are now printed on distinctive paper, manufactured under the inspection of officers of the Treasury Department, at a mill exclusively employed for that purpose. Upon adopting this paper the Secretary of the Treasury published the following circular notice : WASHINGTON, D. 0., July 21, 1869. Notice is hereby given that the Secretary of the Treasury, by authority of law, has adopted a di-stinctive paper, which will be hereafter used, until otherwise ordered, for all obli gations and other securities of the United States. One of its peculiarities is the introduction of colored silk, cotton, or other fibrous material into the body of the paper while in the process of manufacture. By the laws of the United States it is made a felony for any person to have or retain in his custody or possession any paper adapted to the making of any such obligations or securities, and similar to that designated by the Secretary of the Treasury, except under authority of the Secretary of the Treasury, or some other proper officer of the United States; and any person offending against the statute will, on conviction thereof, be punished by a fine not exceeding five thousand dollars, or by imprisonment and confinement at hard labor not exceeding fifteen years, or both, in the discretion of the court. G-EO. S. BOUTWELL, Secretary of the Treasury. Another pecuii- Another peculiarity, and perhaps the most important and distinctive one, is the localizing of blue fibres in the body of the paper, or the introduction of blue fibres in parallel lines of about two inches in width and about three and a Notice of tna adoption of a dis tinctive paper. CHAP. III.] MUTILATED CURRENCY. 4 half inches apart, in addition to the fibres of other colors distributed throughout the paper. 5. REGULATIONS AND INSTRUCTIONS FOR REDEMPTION OF MUTILATED AND DEFACED CURRENCY. The Treasury Department is desirous of withdrawing AH defaced not from circulation all notes issued prior to 1869, as well as ^^J^ all mutilated and defaced notes and fractional currency, drawn. and of keeping in circulation throughout the country clean new currency of the latest issue, and has adopted the fol lowing regulations and instructions on that subject, and in relation to the redemption of fragmentary notes and the distribution of new currency of the different denominations and of the most recent issue : I. Defaced and mutilated currency. 1. Defaced and mutilated United States and fractional what notes are notes, each equaling or exceeding by face measurement redeemable at three-fifths of its original proportions in one piece, if clearly genuine, are redeemable at the full face value of whole notes, in new currency, by the Treasurer, the several As sistant Treasurers, and Depositaries of the United States, and all National Bank Depositaries, and are receivable at their full lace value by all .officers of the Treasury Depart ment in payment of currency dues to the United States. 2. The officers and Bank Depositaries by whom such Defaced notes currency is received will not use it in their disbursements, not to h e used by but will forward it to the Treasurer of the United States at de P si >k s &( Washington at the expense of the Department, under the Government contract with Adams Express Company. 3. Whenever the amount presented for redemption at when r one time to an Assistant Treasurer, Depositary, or Bank IK^V payable, Depositary equals or exceeds fifty dollars in United States notes, or five dollars in fractional currency, it is optional with the officer or bank to either pay the owner its value in new currency, or give a receipt conditioned for such pay ment when return for the amount has been received from the Treasurer. When the same person habitually presents currency for redemption in sums somewhat less than those mentioned, it is discretionary with the officer or bank to refuse to receive it until it has been made up to the required amount. 4 face value, an<t how. 50 MUTILATED CURRENCY. [CHAP. III. Department pays expense? of transportation to Washington. desires to with draw from circu lation defaced notes, &c. Fractional cur rency to be as sorted, &c. Fragmentary notes, how re deemed. when less than half. 4. The Department will receive at its own expense, under trie contract with Adams Express Company, from any per son, company, firm, bank, or corporation, United States notes and fractional currency which are defaced or muti lated, or in any way unfit for circulation, provided that the fractional currency be sent in sums of five dollars and up wards, and the United States notes in sums of fifty dollars and upwards. Parties remitting currency for redemption, and especially officers of the department, are, however, re quested to make their remittances as large as practicable, and, when it is possible, to remit in sums of one thousand dollars or an even multiple thereof. United States notes and fractional currency may be for warded in the same package at the expense of the Depart ment if at least five dollars in fractional currency is inclosed, or if the amount of the whole remittance equals or exceeds fifty dollars. 5. The Department is desirous of withdraxving from cir culation all United States notes issued -prior to the issue of 1869, whether mutilated or defaced or not, and will redeem them on the same terms and in the same manner as notes unfit for circulation. 6. Fractional currency, before being presented for re demption, must be assorted into the different issues ; each issue must be assorted by denominations and inclosed in paper straps at least one inch wide, securely fastened ; each strap , if the amount of the parcel will admit, must con tain one hundred notes of the same denomination ; and on each strap must be written with ink the number of pieces and the denomination inclosed, and the name of the owner. The entire amount must be securely done up in one package, and upon the wrapper the date, the amount inclosed, and the name of the owner must be written with ink. II. Fragmentary notes. 1 . Fragments of United States notes and fractional cur rency, constituting less than three-fifths of the original proportions of the notes, and notes torn or cut into pieces each less than three-fifths, are redeemable only by the Treas urer of the United States. 2. Fragments less than half are redeemed only when accompanied by an affidavit that the missing portions have been totally destroyed. The affidavit must state the cause and the manner of the mutilation, and the character of the affiant must be certified to be good by a magistrate or other public officer. When accompanied by satisfactory proof, CHAP III.] MUTILATED CURRENCY. 51 when half and less than three- fifths. Interest on frag mentary notes bearing interest. Rules apply to old demand notes. Unredeemed fragments retain ed; counterfeit notes returned. Mode of trans mission to Treas urer. such fragments will be redeemed at the full face value of the notes of which they are part. 3. Fragments each less than half, but together purport ing to constitute more than one-half of a note, are redeemed only when it appears, either from the notes themselves or from an affidavit made in conformity to the foregoing para graph, that they are actually parts of one original note. 4. Fragments constituting half or more than half, but less than three-fifths of notes, when unaccompanied by evi dence that the missing portions have been destroyed, arc redeemable for half of the face value of the notes. 5. In redeeming, under the last preceding regulation, interest notes, with which interest is payable, half of the in terest due on the notes will be paid. 6. Demand notes are redeemable in coin by the Treasurer, on presentation at his office, on the same terms as to muti lations as United States notes. 7. Unredeemed fragments less than half are retained by the Treasurer; counterfeit notes are branded and returned. III. Mode of transmission to Treasurer. When a person making a remittance, either by mail or by express, fails to give his full name and post-office address, including the State, the remittance is retained until the name and address are furnished, together with a satisfactory de scription of the package claimed. An inventory, describing the contents by parcels, denom inations, and amounts, should accompany every remittance. IV. Remittances by express. 1. All remittances for redemption should be addressed to -by express. the Treasurer of the United States, Washington, D. C. 2. The packages should be put up in wrappers of stout packages, how paper or cloth, tied with strong twine, secured by careful put up. sealing, and plainly marked on the outside with the amount and nature of the contents, the full name and post-office ad dress of the consignor, and the fact that they are forwarded under the Government contract with Adams Express Com pany. 3. A letter of advice, written on not less than half a sheet -accompanied of commercial note paper, must be put inside the package, with letter. and a duplicate letter should be sent by mail to the Treasu rer on the day that the remittance is forwarded. V. Remittances by mail. 1. All remittances by mail for redemption should be ad- Remittances by dressed to the Treasurer of the United States, Washington, man. 52 MUTILATED CURRENCY. [CHAP. Ill how sealed up, Ac. Remittances by mail are at risk of Return of new notes or checks, now made. how usually made. Same subject. Proceeds from Government offi cers credited to their accounts if desired. D. C. Letters or packages so addressed are forwarded with out charge for postage, whether they contain money or not. 2. Money for redemption, after heing prepared as herein before directed, should be sealed or tied up in paper of suit able strength, and plainly marked on the outside with the owner s name and full address, and with the amount inclosed. The package should then be sealed up in an envelope, to gether with a letter of advice, written on not less than half a sheet of commercial note paper, stating the name and full post-office address of the owner, the value of the remittance, and the manner in which return shall be made. 3. Remittances to the Treasurer by mail are invariably at the risk of the owners. All communications to the Treas urer, in regard to packages ascertained to have been lost in transmission by mail, are referred for investigation to the Second Assistant Postmaster General, to whom any further inquiry on the subject should be addressed. 4. It is a protection against loss to register letters contain ing money ; but the registry fee must in all cases be prepaid by the party remitting. VI. Returns, how mads. 1. Returns for amounts less than five dollars are usually made in new currency by mail at the owner s risk, but if he so requests, returns are made by check on any of the cities named below, or in new currency by express at his expense. 2. Returns for amounts of five dollars and upwards, re ceived by mail, are usually made by transfer checks on the Assistant Treasurer of the United States in New York, Bos ton, Philadelphia, New Orleans, or San Francisco, as the owner may request; but if the owner desires new currency, it will be forwarded by express, on the terms stated in the next paragraph. 3. Returns for amounts of five dollars and upwards in fractional currency, and fifty dollars and upwards in United States notes, are ordinarily made in new currency by express, at the expense of the Department ; but if the owner requests it, a check on any of the above-mentioned Assistant Treas urers will be sent. Returns for five, or more than five but less than fifty dollars, in United States notes, are ordinarily made by check ; but new currency is returned by express, at the owner s expense, whenever he requests it. 4. The proceeds of remittances from Assistant Treasurers, Designated Depositaries, and other officers of the Govern ment, and National Bank depositaries, are,, when they so request, credited in account. CHAP. III.j MUTILATED CURRENCY. 53 VII. General Instructions. 1. Every officer of the Treasury Department is required, spurious n^tes tc whenever any spurious note purporting to have been issued be stam P e<1 - by the United States is presented to him, to write or stamp on it the word "Counterfeit." 2. Notes of National Banks that have failed or gone into Notes of faiie,j voluntary liquidation are received, redeemed, and forwarded banks, how re- to the Treasurer by the officers and banks before-mentioned d for retirement under these rules, in the same manner and on the same terms as United States notes of issues prior to 1869. Notes of all other National Banks, whether muti lated or not, are redeemable only by the banks which issued them and by their redeeming agents. 3. In case of the loss or destruction of one of his checks, Payment of lost and of an application for a duplicate, the Treasurer stops c j ieeks ma y be payment of the original check, and furnishes the applicant for a duplicate with a form of bond of indemnity, upon re turn of which, properly executed, a duplicate is issued. VIII. New fractional currency. In addition to being forwarded, when desired, in return New fractional for old, defaced, and mutilated currency, on the terms al- currency, how ready mentioned, new fractional currency is forwarded by express from the Treasurer s office, under the Government contract with Adams Express, Company, in sums of even thousands of dollars 1. On the receipt of original certificates of deposit to the Treasurer s credit, issued by Assistant Treasurers and Des ignated Depositaries of the United States and National Bank Depositaries ; and 2. On the receipt and collection of drafts on banks and bankers in Boston, New York, Philadelphia, and Wash ington. If the amount applied for is less than one thousand dol lars, the express charges at contract rates are deducted from the remittance ; if less than an even multiple of one thous and dollars, the charges on the fractional part of one thousand dollars included in the amount are deducted. IX. Government contract with Adams Express Company. 1. The Government contract with Adams Express Com- contract with ex- pany extends to and includes all cc points accessible through press company notes, &c. established express lines, reached by continuous railway i connection," within the United States, but does not extend westward beyond Omaha and Nebraska City, in Nebraska, and Atchison and Leavenworth, in Kansas, nor include the 54 MUTILATED CURRENCY. [CHAP. IIL lines of Wells, Fargo & Co., in Missouri and Iowa. The contract covers the lines of the following express compa nies: Adams, American Merchants Union, Central, Earl, Eastern, Harnden, Hope, Howard, National, New Jersey, Southern, Union, United States, and United States and Canada. Remittances can be made by express by private parties, at the expense of the Department,, only from points within the territory covered by the contract. CHAP. IV. "I REGISTERED HONDS. 65 CHAPTER IV. REGISTERED AND COUPON BONDS, HOW TRANSFERRED; ISSUE OF DUPLICATES IN CASE OF LOSS OR DESTRUCTION; CONVERSION OF BONDS; PAYMENT OF INTEREST. I. Registered bonds or stock, how as- I 5. Conversion of coupon bonds to regis- signed. 2. Lost or destroyed registered bonds. 3. Coupon bonds, how transferred. 4. Destroyed and defaced bonds. tered stock. 6. Payment of interest on registered stock. 7. Payment of coupons. 8. Payment of interest before maturity. 1. EEGISTERED BONDS OR STOCK, HOW ASSIGNED. These bonds, without coupons attached, are made payable Registered to the person or persons named therein, who alone can col- lect the interest thereon and the principal when payable, and are transferable only on the books of the Register of the Treasury, in accordance with the following rules and in structions of the Treasury Department : Transfer of stock or registered bonds. Stock to be transferred, when properly perfected,, should Rules and regu- be transmitted to the REGISTER OF THE TREASURY, accompa- lations for trans - nied by an explicit letter of instructions, giving the official title of the loan ; the date of the authorizing act ; the num ber and amount of each certificate ; the name of the assignee, plainly written; his place of residence, giving the number of the house, the name of the street, and the city or town, county, and State ; the denomination of the certificates de sired in exchange ; and the depository at which the interest is to be made payable. If stock of different loans is sent at the same time, a sep arate letter must accompany each issue or series, like the following form : 56 REGISTERED BONDS. [CHAP. IV. FOOD of letter. Closing of the transfer books. Form of letter. NEW YORK, August 10, 1872. To the KEGISTER OF THE TREASURY : Herewith find $20,000 registered stock, CONSOLS of 1868 : act of March 3, 1865, viz : New certificates. No. 13,921 $500 13,987 500 6,232 1,000 6,409 1,000 6,101 1,000 No. 2,112. 813, 1,627, $1,000 5,000 10,000 $20,000 Which please register in two $10,000 certificates in the name of Jno. Henry Brown, of No. 23 Waverly street, Chicago, Cook county, Illinois, making the interest paya ble at the United States Depositor}^, Chicago, Illinois. Very respectfully, JNO. HENRY BROWN. New certificates. The certificates forwarded for transfer are canceled, and new ones issued in the name of the assignee. The new certificate bears interest from the first day of the quarter or half year (as the interest may be payable) in which the transfer is made. The new certificate is usually returned the same day the old is received, and is invariably sent by mail to the party forwarding the assigned certificate, unless otherwise posi tively instructed. . If the certificate is sent by express, it must be at the cost of the party so ordering. Closing of the transfer books. For the purpose of preparing the interest schedules, the transfer books are closed for thirty days on all loans except the Funded Loan of 1881, and on this latter for fifteen days, immediately preceding interest day. The dates of closing are as follows : Loan of 1858 June 1st and December 1st. Loan of February, 1861 June 1st and December 1st. Loan of July, 1861 June 1st and December 1st. Five-twenties of 1862 April 1st and October 1st. Loan of 1863 June 1st and December 1st. Ten-forties of 1864 February 1st arid August 1st. Five-twenties of March, 1864 April 1st and October 1st, Five-twenties of June, 1864 April 1st and October 1st. Five-twenties of 1865 April 1st arid October 1st. CHAP. IV.] REGISTERED BONDS. 57 Consols of 1865 June 1st and December 1st. Consols of 1867 June 1st and December 1st. Consols of 1868 June 1st and December 1st. Funded loan of 1881 January 15, April 15, July 15, and October 15. Pacific Kailway stock June 1st and December 1st. If stock to be transferred is not received previous to the who entitled to day for closing the transfer books, the dividend will be {^^J^ declared to the party whose name appears upon the face of after books the certificate and the record, and the assignee must look closed, to him for the accrued interest for that quarter or half year. Form of assignment. The printed form on the back of the certificate should be Form of assign- carefully followed, arid all the blanks filled. ments - The name of the assignee should be plainly written in full in the blank space for that purpose. If the certificate is to be divided among two or more per sons, their names and the amount to each should be plainly indicated in the assignment. If only a part of the certifi cate is assigned, a new certificate for the remainder will be issued to the former payee. Certificates should never be assigned in blank, as this gives them the character of coupon bonds, and they are then transferable by delivery. A detached assignment, where no assignment appears on the bond, should never be used, as it invites fraud or forgery should the certificate fall into improper hands. Assignments by representatives of deceased persons. In case of death or successorship, the representative or Assignments by successor must furnish official evidence of decease and ap- representatives . . of deceased per- pomtment. sons> An executor or administrator may assign stock standing in the name of a deceased person. Where there is more than one legal representative, all must unite in the assignment, unless by a decree of court or provision of will some one is designated to dispose of the stock. If the stock was held by the deceased as a fiduciary, the letters of administration must be accompanied by an order of the court, authorizing the transfer. Assignments in foreign countries. Where the payee at the time of his death was a resident in foreign of a foreign country, the person claiming to direct the 58 REGISTERED BONDS. [CHAP. IV. transfer must produce an exemplified copy of the will or other instrument conferring the authority, duly certified under the hand and seal of the proper officer, attested by the certificate of a United States minister, charge, consul, vice consul, or commercial agent, or, if there be none, by a notary public, to the effect that such exemplified copy is granted by the proper officer or tribunal, and is in due form, and according to the laws of the country. The as signment should be executed as hereinbefore directed. Execution of assignments. it Execution of p.s- The payee should sign his name to the assignment as signmcnts. j s wr itten in the face of the certificate. If issued to a firm, it must be signed by a member author ized to sign the firm-name, of which authority the person witnessing must be satisfied ; if to joint owners, co-trustees, executors, administrators, or guardians, each person must sign for himself; if to a corporation or company, the official character of the person signing, and his authority to dis pose of the stock, should be duly attested by vote or resolu tion of the board of directors, or its equivalent, certified under seal. Where an officer is authorized to assign by virtue of his office, a certificate of the fact and of his election must be fur nished, under seal, together with a certified copy of the by laws. All such certificates are placed on file for reference in future transactions, and need not be repeated if properly referred to. The following form of authority may be used : Form of authority by vote. Form of author- At a meeting of the Board of Directors of the National itybyvote. Savings Institution of Washington, D. C., held July 10, 1872, it was, on motion, Resolved, That James Jones, President, and Henry Smith, Treasurer, or either of them, are hereby authorized and empowered to assign any and all United States stock now standing [or which may hereafter stand] in the name of this institution. I certify that the above is a true copy from the minutes. [Corporate seal.] HENRY Sjl HH, Treasurer and Secretary of Board. Form of vote under by-laws. -n^der by-laws. At the annual meeting of the stockholders of the Treas ury National Bank of Washington, D. C., held July 1, CHAP. IY.1 REGISTERED BONDS. 59 1872, John Doe was duly elected President, and Richard Roe Cashier, and, as such, are jointly or severally empow ered by the by-laws (a certified copy of which is hereto an nexed) to sell and assign any and all United States stock now standing, or which may hereafter stand, in the name of this bank. Attest: RICHARD ROE, Cashier. [Seal of bank.] Acknowledgment of assignment, Acknowledgments of assignments, when not made at the Ac-knowiedg- Department, must be before an Assistant Treasurer, Desig- "^ ofass:ga * nated Depositary, United States judge, district attorney, clerk of a United States court, or collector of customs, but a notary public is authorized to take acknowledgments on all loans except the Funded Loan of 1881, and on this loan the president or cashier of a National Bank is au thorized. The witness must, in all cases, append his official title, and affix his seal of office, if he has one. The president or cashier of a National Bank must affix the title of the bank. Acknowledgment in foreign countries. Acknowledgments in foreign countries may be made be- in foreign, fore a United States minister, charge, consul, vice consul, countries - or commercial agent. A notary public, or other equivalent officer, in a foreign country, may take acknowledgments, but his official character must be properly verified. The official seal, where there is one, should in all cases be af fixed. Powers of attorney to assign stock. Persons entitled to assign stock may appoint an attorney powers of attor- for that purpose, who, by virtue of the authority so con- ney to assign ferred, can execute the assignment in the same manner as 8 provided for the constituent. No officer of the Treasury should be selected as attorney. The following form may be used : Form of power. KNOW ALL MEN BY THESE PRESENTS, That I, John Doe, do fwn ft hereby appoint Richard Roe my attorney, to sell and as sign all United States stock now standing [or ivliicli may hereafter stand] in my name on the books of the Treasury Department, granting to said attorney full power to appoint one or more substitutes for that purpose, hereby ratifying and confirming all that may be lawfully done by virtue hereof. 60 LOST REGISTERED BONDS. [ClIAP. IV. Witness my hand and seal this 9th day of July, A. D. 1872. J OHN D OE . [ y -^--] Executed before me this 10th day of July, A. D. 1872. [Official seal.] J HN JoNES > Collector of Customs, Chicago, III. Power to collect interest. Powers to collect interest should follow the same general form. Acknowledgment of powers. Powers of attorney for the transfer of stock or the collec tion of interest must be acknowledged in the presence of some one of the officers authorized to take acknowledg ments of assignments. Where any such officer has an official seal,, it must be affixed. Powers of substitution. powers of eubsti- Powers of substitution must be executed and acknowl edged in the same manner as powers of attorney, and should follow the same general form. to coll act in terest. ^acknowledg ment of. tntion. No fees charg- able for assign ments. No fees. No fees will be charged by a United States minister, charge, consul., vice consul, or commercial agent for wit nessing and certifying an assignment or power to assign stock or collect interest thereon. No charge is made by the Department for transferring certificates or lor changing coupon bonds into registered stock. Papers in foreign languages. papers in foreign Powers of attorney, and all other papers executed in the languages must United States, must be in the English language. If exe cuted abroad in any other language, an accurate English translation must accompany each. he translated. 2. LOST on DESTROYED KEGISTERED BONDS. Notice of lost Owners of lost or stolen registered bonds should give no- Bhouidbtg^en 9 tice of the fact of the loss or l arcen J> as soon as known to to Treasury DO- them, to the Treasury Department at Washington, D. C., in order that innocent persons may be saved, if possible, CHAP. IV.] LOST REGISTERED BONDS. f,l from loss by forged or fraudulent assignments on the back of the certificates. When a caveated registered bond is sent in for transfer, the Treasury Department retains and holds it for the rightful owner, to whom notice of the fact is immediately given, and at the same time notice that the assignment is supposed or claimed to be fraudulent is sent to the person from whom it was received, that he may institute measures to trace out the parties to the fraud ; but the Department does not undertake, by detectives or otherwise, to discover the guilty persons. Whether or not any particular bond has been caveated may be ascertained, if the genuine number is known, by writing to the Secretary of the Treasury for information. Owners of lost or destroyed registered bonds may obtain Duplicates of lost duplicates thereof by complying with the provisions of the ^l^^^^ & ~ following law of Congress, passed for that purpose : JOINT RESOLUTION TO ENABLE OWNERS TO OBTAIN DUPLICATES OF LOST AND DESTROYED REGISTERED BONDS OF THE UNITED STATES. Resolved by the Senate and House of Representatives of the Law of congress. United States of America in Congress assembled, That the Secretary of the Treasury be, and hereby is, authorized and directed, whenever it is proved by clear and satisfactory evidence that any duly registered bond of the United States, bearing interest, issued for valuable consideration in pur suance of law, has been lost or destroyed, so that the same is not held by any person as his own property, to issue a duplicate of said registered bond, to be so marked, of like amount, and bearing like interest as the bond so proved to be lost or destroyed : Provided, That the owner of such missing bond shall file in the Treasury a bond in a penal sum equal to the amount of said missing bond, and the interest which would accrue thereon, until the principal thereof is due and paya ble, with two good and sufficient sureties, residents of the United States, to the approval of the Secretary of the Treas ury, with condition to indemnify and save harmless the United States from any claim because of the said lost or destroyed bond. Approved March 3, 1871. The regulations and instructions of the Treasury Depart- Regulations re- rnent in relation to lost certificates are as follows : spectmj? lost ce/ 62 LOST REGISTERED BONDS. [CHAP. IV, Caveating lost certificates. Form of caveat. Duplicates obtained. how Lost certificates. The Secretary of the Treasury should he immediately notified of the loss of any certificate of registered stock, that a caveat may he entered against its transfer. The notice should give the number and amount of the certificate; the official title of the loan; the date of the authorizing act; and the name and address of the regis tered payee. If the stock is not recovered within a reasonable time, a duplicate will be issued, under the regulations hereinafter prescribed. The law does not authorize the issue of duplicates in lieu of lost coupon bonds. The following form of caveat may be used : Form of caveat. NEW YORK CITY, August 1, 1872. To the SECRETARY OF THE TREASURY: Please take notice that certificates of registered stock No. 2310 for $10,000, Loan of July, 1861, acts of July 17 and August 5. 1861 ; 903 for $5,000, Loan of 1863, act of March 3, 1863; 1220 for $5,000, Five-twenties of 1865, act of March 3, 1865; 1920 for $10,000, Funded Loan of 1881, acts of July 14, 1870, and January 20, 1871, were stolen from the undersigned on or about the 25th day of July last. Please enter a caveat against their transfer. The registered payee of the first one was Jno. Doe, of No. 25 Kiver street, Troy. N. Y., and of the other three, Respectfully, yours, RICHARD ROE, Of No. 9 Park Place, New York City. Duplicates, how obtained. In case a lost certificate of registered stock cannot be recovered, the payee should furnish the Secretary of the Treasury with an affidavit, duly authenticated, showing the number and amount of the certificate ; the official title of the loan ; the date of the authorizing act ; the name and address of the registered payee ; the name of the assignor and assignee ; the time and place of purchase ; of whom purchased ; the consideration paid ; and the material facts and circumstances attending the loss. On receipt of this affidavit, with such additional evidence as the payee may be able to furnish, the case will be re ferred to the proper officer for his decision. CIUP IV.] LOST REGISTERED BONDS. 63 As soon as a favorable conclusion is reached, a bond of indemnity in double the amount of the lost certificate will be prepared and forwarded for execution ; and upon its re turn, executed in conformity to instructions, the duplicate will be issued. In all cases, and especially where there are conflicting claimants, proofs should be made as full and clear as possi ble, that the title be so proved as to leave no doubt of the good faith of the holder or claimant. The following form of affidavit may be used: Form of affidavit. Personally appeared before me, a notary public in and Form of affidavit, for the county of Cook, and State of Illinois, the subscriber, John Doe, who, being duly sworn according to law, deposes and says : That he was the lawful owner of one certificate of registered stock of the United States, numbered two hun dred and three, (203,) for ten thousand (10,000) dollars, Consols of 1868, act of March 3, 1865, registered at the Treasury of the United States in the name of Richard Roe, now residing at number two hundred and nine (209) South Clark street, in the city of Chicago, and State of Illinois ; that the said certificate was indorsed to me by the said Ki chard Roe, all the blanks thereon being properly rilled out, and the transfer witnessed by John Smith, United States district attorney for the northern district of Illinois ; that said stock was purchased at Chicago, Illinois, on or about the 15th day of July, A. D. 1872, of the said Richard Roe ; that the consideration paid therefor was eleven thous and two hundred (11,200) dollars, lawful money of the United States ; that the said certificate was stolen from the vault of the Ninth National Bank of the City of Chicago, on the night of the 20th of July, A. D. 1872, by some per son or persons unknown to me ; and that due diligence has been exercised in endeavoring to recover the same, without success. JOHN DOE, Of No. 23 West Lake street, Chicago, III Sworn and subscribed before me this 1st day of August, A. D. 1872. JOHN JONES, [Notarial seal.] Notary Public. Destroyed or mutilated bonds, whether registered or coupon. Parties presenting claims on account of coupon or regis- ? , , \ . I ". hinted bonds, tered bonds, which have been destroyed in whole or in whether regis- part, must furnish the same evidence as in the case of lost tered or coupon. 64 COUPON BONDS. [CnAF. IV. bonds, and, in addition, must state whether the bonds were coupon or registered. -same subject. Duplicates of bonds which are mutilated, defaced, or in dorsed, so as to be unsaleable, may be obtained under another law hereinafter set forth without giving a bond of indemnity. (Seepage 68.) Coupon bonds. Decision.? of the courts as to transfer of bonds before maturity. Different, rule aj>- plicable to bonds over-due. 3. COUPON BONDS, HOW TRANSFERRED. These bonds, with the semi-annual or quarter-annual coupons attached, are payable to bearer, and the legal title thereto passes by delivery, like bank bills and legal-tender notes. The Government pays them to the bearer who holds them in good faith, without investigating how pre vious holders acquired their title. The Supreme Court of the United States has recognized and settled the following principles as applicable to coupon bonds : "The possession of such paper carries the title with it to the holder. The possession and title are one and insepar able. The party who takes it before due for a valuable consideration, without knowledge of any defect of title, and in good faith, holds it by a title valid against all the world. Suspicion of defect of title, or the knowledge of circum stances which would excite such suspicion in the mind of a prudent man, or gross negligence on the part of the taker at the time of the transfer, will not defeat his title. That result can be produced only by bad faith on his part. The burden of proof lies on the person who assails the right claimed by the party in possession. Such is the settled law of this court, and we feel no disposition to depart from it." (Murray v. Lardner, 2 Wallace, 110 ; Thomson v. Lee County, 3 Wallace, 327; Texas v. White, 7 Wallace, 735.) "These rules were fully discussed in Murray v. Lardner, (cited above.) We held in that case that the purchaser of coupon bonds before due, without notice and in good faith, is unaffected by want of title in the seller, and that the burden of proof, in respect to notice and want of good faith, is on the claimant of the bonds as against the purchaser. We are entirely satisfied with this doctrine." "But these rules have never been applied to matured obligations. CHAP. IV.] COUPON BONDS. Purchasers of notes or bonds past due take nothing but the actual right and title of the vendors. The bonds in question were dated January 1, 1851, and were redeemable after the 31st of December, 1864. In strictness, it is true they were not payable on the clay when they became re deemable; but the known usage of the United States to pay all bonds as soon as the right of payment accrues, ex cept where a distinction between redeemability and paya bility is made by law, and shown on the face of the bonds, requires the application of the rule respecting over-due obligations to bonds of the United States which have be come redeemable, and in respect to which no such distinc tion has been made." (Texas v. White, 7 Wallace, 735; Texas v. Hardenberg, 10 Wallace, 68.) The Supreme Judicial Court of Massachusetts has made Title of ho/^rs the following decision as to the title of holders of coupons: "But in the opinion of a majority of the court the coupons in question do riot stand upon the same ground as chattels. They were negotiable promises for the payment of money, issued by the Government, payable to bearer and transfer able by mere delivery, without assignment or indorsement. They are therefore not to be considered as goods, but as rep resentatives of money, and subject to the same rules as bank bills or other negotiable instruments payable in money to bearer. The rule o caveat emptor does not apply to them. It is now well settled that the bearer of a bank bill which has been stolen from the bank may recover the amount from the bank, unless it is proved that he did not take it in good faith and for a valuable consideration; and that his knowl edge of suspicious circumstances is immaterial, unless amounting to proof of want of good faith." (Spooner v. Holmes, 102 Mass., 503.) And the Supreme Court of the United States has declared coupons detach, that ed from " Bonds with coupons, payable to bearer, are negotiable securities, and pass by delivery, and in fact have all the qualities and incidents of commercial paper. It is not necessary that the holder of coupons, in order to recover on them, should own the bonds from which they are detached. The coupons are drawn so that they can be separated from the bonds, and, like the bonds, are nego tiable ; and the owner of them can sue, without the produc- tfg DESTROYED AND DEFACED BONDS. [CHAP. IV. tion of the bonds to which they are attached, or without being interested in them." (Thomson v. Lee County, 3 Wallace, 331.) 4. DESTROYED AND DEFACJD BONDS. caveats of lost Persons often forward to the Treasury Department caveats and stolen bonds. Q f j Qg an( j gtolen coupon bonds, but the only advantage gained thereby is, that when those bonds, or the coupons, come in for redemption, the Department notifies the claimants who have filed the caveats of the presentation of the bonds, and furnishes the names of the parties presenting them, in order that the loser may have all the information within the reach of the Government which may possibly enable him to dis cover the parties who fraudulently obtained them. Beyond this the Government can afford no relief. There are great advantages in holders carefully taking the numbers, dates, denominations, issues, and series of their coupon bonds, and preserving them in some place apart from the bonds themselves ; because in case of destruction of the bonds, by fire or otherwise, duplicates may be obtained under a law of Congress passed June 1, 1872, and unless such memoranda are kept, it is difficult, if not impossible, to describe coupon bonds which have been destroyed, with sufficient accuracy to obtain the benefits of the law. The facts as to the title of registered stock, but not as to coupon bonds, may be gathered from the records of the Department. The following is the law for the issue of duplicates of destroyed or defaced bonds : AN ACT TO PEOVIDE FOE THE ISSUE OF BONDS IN LIEU OF DESTEOYED OE DEFACED BONDS OF THE UNITED STATES. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That whenever it shall appear to the Secretary of the Treasury, by clear and unequivocal proof, that any interest-bearing bond of the United States has, without bad faith upon the part of the owner, been destroyed, wholly or in part, or so defaced as to impair its value to the holder, and which bond shall be identified by number and description, the Secretary Numbers, &c., of bonds should be taken and kept by holders. Pefaopd and de stroyed bonds. CHAP. IV.] DESTROYED AND DEFACED BONDS. 67 of the Treasury shall, under such regulations and with such restrictions as to time and retention for security or other wise as he may prescribe, issue a duplicate of such bond, having the same time to run, bearing like interest as the bond so proved to have been destroyed or defaced, and so marked as to show the original number of the bond destroyed and the date thereof: Provided, That where such destroyed or defaced bonds shall appear to have been of such a class or series as has been or may,, before such application, be called in for re demption, instead of issuing duplicates thereof they shall be paid, with such interest only as would have been paid if presented in accordance with such call. SEC. 2. That the owner of such destroyed or defaced bond shall surrender the same, or so much thereof as may remain, and shall file in the Treasury a bond in a penal sum double the amount of said destroyed or defaced bond, and the inter est which would accrue .thereon until the principal thereof is due and payable, with two good and sufficient sureties, residents of the United States, to be approved by the Secre tary of the Treasury, with condition to indemnify and save harmless the United States from any claim upon the said destroyed or defaced bond. Approved June 1, 1872. This act applies to both registered and coupon bonds, Applies to regis while the act of March 3, 1871, printed on page 61, applies ^ d c up n only to those which are registered. The regulations and instructions of the Treasury Depart- Regulations and ment for the issue of duplicate bonds under the foregoing mstructlons - act are the same as those under the law for the issue of duplicates of lost registered bonds, which are set forth in full on pages 61-64. Those instructions must be carefully followed, specifying, however, whether the bonds are cou pon or registered. It will be seen that the law makes no provision for the Duplicates of lost issue of duplicates of lost coupon bonds, as it does of those coupon bonds not a provided for. which are registered, for the reason that the former are payable to bearer and pass by delivery, and the bona fide holders acquire a legal title thereto ; while as to the latter,, the lost registered bond, like a certificate of shares in a corporation, only designates the owner, and the record of it in theKegister s office, where alone it can be transferred, is still evidence of the payee s title. 68 Duplicates of de faced bonds. CONVERSION OF COUPON BONDS. [CHAP. IV. The foregoing act, so far as it relates to defaced bonds, seems to apply especially to tho-e which, are defaced or mu tilated under such circumstances or in such manner as to excite suspicions of their genuineness, or as to render it possible that there may be other claimants thereto. The provisions of the last clause of section 7 of the act of June 30, 1864, chapter 172, were sufficient to authorize the issue of duplicates for bonds which were so mutilated, defaced, or indorsed as simply to render their acceptance by pur chasers in the market somewhat objectionable, on account of the appearance of the bonds, but without raising any sus picions against their genuineness or the title of the holder thereto. That law is as follows: SEC. 7. And be it fur flier enacted, That * * * * And for all mutilated, defaced, or indorsed coupon or other bonds presented to the Department, the Secretary of the Treasury is authorized to issue, upon terms and under regu lations as aforesaid, and in substitution therefor, other bonds of like or equivalent issues. When new bonds are issued under this act as a substitute for those which are mutilated, defaced, or indorsed, no bond of indemnity is required. If any part of the bonds are missing, duplicates can be obtained only under the laws and regulations hereinbefore set forth. Conversion of coupon to regis- tered bonds. Law of Congr?hs. 5. CONVERSION OF COUPON BONDS TO REGISTERED STOCK. Under the following law holders of coupon bonds can have the same converted into registered stock of the same loan, without any charge therefor, by transmitting them to the Secretary of the Treasury at their own expense and request ing such exchange ; but registered stock cannot be converted into coupon bonds : ACT OF JUNE 30, 1864, CHAPTER 172. SEC. 7. And be it further enacted, That the Secretary of the Treasury is hereby authorized to issue, upon such terms and under such regulations as he may from time to time CHAP. IV.] INTEREST ON REGISTERED STOCK. 09 prescribe, registered bonds in exchange for, and in lieu of, any coupon bonds which have been or may hereafter be lawfully issued ; such registered bonds to be similar in all respects to the registered bonds issued under the acts authorizing the issue of the coupon bonds offered for exchange. 6. PAYMENT OF INTEREST ON REGISTERED STOCK. The following are the rules of the Treasury Department interest on regis in relation to the payment of interest on registered bonds : l Payment of interest. Holders of registered stock of all loans but the funded loan where payable, of 1881, must select one of the following offices at which to receive their interest. It is payable to the holder on application in person or by attorney. The place of payment will be changed on notice in writ ing from the holder, if sent to the Register of the Treasury before the transfer books are closed. The Treasury of the United States at Washington, D. C. Dividend offices The Assistant Treasury at Boston, Massachusetts. The Assistant Treasury at New York, New York. The Assistant Treasury at Philadelphia, Pennsylvania. The Assistant Treasury at Baltimore, Maryland. The Assistant Treasury at Charleston, South Carolina. The Assistant Treasury at New Orleans, Louisiana. The Assistant Treasury at St. Louis, Missouri. The Assistant Treasury at San Francisco, California. The Designated Depository at Buffalo, New York. The Designated Depository at Pittsburg, Pennsylvania. The Designated Depository at Cincinnati, Ohio. The Designated Depository at Chicago, Illinois. In case stock is transferred between the day for closing the interest on stor-k dividend books and the day it becomes due, the interest is assigned while declared to the registered payee, and the purchaser must look transfer hooks i / , i , R L J "re closed. to him for that interest. On the funded loan of 1881, registered interest is payable interest on fund- by check of the Treasurer to the order of the holder or his ed loan pay^ie attorney. by cheeks. These checks v T ;ili be sent by mail, when the correct post- office address is known, otherwise they will be held by the PAYMENT OF COUPONS. [CHAP. IV. Interest on stocks of joint holders. Interest not claimed for nine ty days, how col lected. Dividend officers to deposit un claimed interest at once, &c. Treasurer until called for. They are payable, when prop erly indorsed, on presentation at any one of the above-named offices. Holders of this stock should notify the Register of the Treasury of any change in their address. Interest will be paid to any one of several joint holders, or co-trustees, executors, administrators, or guardians, but in the execution of a power to a third party to collect all must join: In case of the death of either, the survivors will be recognized as having full authority, upon due proof of Kiich death and survivorship. The same rule will govern at the final redemption of a loan. If the interest on registered stock of the old loans is not claimed within ninety days after interest day, it will be re turned to the Treasury as unclaimed, and must then be col lected in person or by attorney, at the office of the Treasurer in Washington. For the convenience of the public, powers to collect speci fied unclaimed interest may be made in favor of the "Chief of the Loan Division of the Secretary s office," and be sent by mail to the Secretary of the Treasury. It will then be collected, and a check for the amount will be sent by mail. Deposits of unclaimed interest should be promptly made by the several dividend offices at the expiration of the ninety days. The certificates of deposit should specifically state why the interest is deposited, and to what loan account it belongs. If on account of several loans, the amount to each must be stated. The information must be full and explicit^ and should be indorsed on the back of the original certifi cate, which should be at once forwarded to the Secretary of the Treasury, t^ie depositor retaining the duplicate. Powers of attor ney to collect in terest. Powers of attorney to collect interest on registered bonds are required to be in the same general form, must be ac knowledged, and are subject to the rules and instructions applicable to powers to assign and transfer certificates of stock, as given on pages 59, 60. T. PAYMENT OF COUPONS. Payment of cou- Coupons are paid by the Treasurer of the United States at Washington, by either of the Assistant Treasurers or Desig nated Depositaries named on page 69, where interest on reg- CHAP. IV.] INTEREST BEFORE MATURITY. istered stock is payable, and also by the Designated Deposit aries at Mobile, Alabama ; Louisville, Kentucky ; Santa Fe, New Mexico; and Tucson, Arizona Territory, at the option of holders. * For the regulations of the Department in relation to the payment of coupons on bonds called in for redemption, when only a fractional part of the coupon is payable, see Chapter V. 8. PAYMENT OF INTEREST BEFORE MATURITY. The Secretary of the Treasury has authority 1: pay, and Payment of in- often does pay, coupons and interest on registered stock in oTmlYm-tty VanCe advance of maturity. When the time of payment is onlv a few days in advance, the whole amount is paid without re bate, but for longer periods of time a proportional rebate has been made. No interest is subject to rebate which is not voluntarily applied for before maturity. Previous public notice is always given in each case of the intention of the Government to make advance payments at any designated time. The following is the law of Congress under which pay- Law for advanced ment of interest is thus anticipated, being chapter 20 of the paym< Kesolutions of the year 1864 : JOINT RESOLUTION TO AUTHORIZE THE SECRETARY OF THE TREASURY TO ANTI CIPATE THE PAYMENT OF INTEREST ON THE PUBLIC DEBT, AND FOR OTHER PURPOSES. Be it resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury be authorized to anticipate the payment of interest on the public debt, by a period not exceeding one year, from time to time, either with or without a rebate of interest upon the coupons, as to him may seem expedient. Approved March 17, 1864. There is a standing order of the Treasury Department standing order that coupons will be paid on presentation sixty days before for P a > rn f nt of J A p * * coupons in ad- nmturity, upon a rebate of interest at the rate of six per vance on rebate cent, per annum in gold. 72 SALE OF GOLD, PURCHASE OF BONDS. [CHAP. V. CHAPTER V. COIN IN THE TREASURY; SALE OF GOLD; PURCHASE OF BONDS; REDEMPTION OF BONDS; MONTHLY DEBT STATEMENT. 1. Coin in the Treasury. * 2. Sale of gold and purchase of bonds. 3. Payment and redemption of bonds. 4. Monthly debt statement. Coin kept in the Treasury. 1. COIN IN THE TREASURY. The coin received from duties on imports has every year been more than the amount necessary for the payment of interest on the public debt and the principal of that portion which has matured during the same period, and for other dis bursements of the Government required to be paid in specie ; and from seventy to a hundred millions of dollars have been constantly kept in the Treasury for several years past, under different Secretaries, as a reserve, to be used at times when the exigencies of the Government should require it. Authority to sell gold. to buy bonds. 2. SALE OF GOLD AND PURCHASE OF BONDS. Congress, by joint resolution of March 17, 1864, author ized the Secretary of the Treasury "to dispose of any gold in the Treasury of the United States not necessary for the payment of interest of the public debt : Provided, That the obligation to create the sinking fund, according to the act of February twenty-fifth, eighteen hundred and sixty-two, shall not be impaired thereby." And by act of July 11, 1862, chapter 142, section 1, the Secretary of the Treasury was authorized to "purchase, at rates not exceeding that of the current market and cost of CHAP. V.] SALE OF GOLD, PURCHASE OP BONDS. 73 purchase not exceeding one-eighth of one per centum, any bonds or certificates of debt of the United States, as he might deem advisable/ The act of March 3, 1863, chapter 73, section 3, repealed so much of the act of July 11, 1862, and another act, as restricted the "negotiation of bonds" to market value, and if that applies to the pur chase of bonds, it allows the Secretary to buy at any price. It has been the invariable practice of the Department HOW gold is * since March, 1869, to sell gold and purchase bonds in p^cha^r the open market, and only through the Assistant Treas urer at New York, on proposals invited from the public by notifications in the newspapers. Within a few days of the close of each month the Secretary sends written instructions to the Assistant Treasurer at New York as to the amount of gold to be sold and bonds to be pur chased during the then next month, specifying the dates of purchases and sales, and the amounts of each. The purchase of bonds always takes place on Wednesday and the sale of gold on Thursday, so that currency may be paid out of the Treasury for bonds before it is required for the payment of gold purchased. The Assistant Treasurer publishes in the newspapers a Public notice notice inviting proposals in the following form, only vary ing the dates and amounts each month according to the direction of the Secretary: OFFICE OF U. S. ASSISTANT TREASURER, NEW YORK, June 3, 1872. During the month of June, 1872, I shall, by order, re ceive bids for gold, and offers of bonds as follows : Bids for gold. Thursday, June 6, millions. Thursday, June 13, millions. Thursday, June 20, millions. Thursday, June 27, millions. Offers of bonds. Wednesday, June 5, millions. Wednesday, Juno 12, millions. Wednesday, June 19, millions. Wednesday, Jane 26, millions. A certified check for five per cent, of bid or offer must be deposited therewith. Proposals will be opened at 12 o clock, noon, each day specified. The Treasury may, at its option, accept offers of bonds or bids for gold in excess of the amount advertised for. SALE OF GOLD, PURCHASE OF BONDS. [CHAP. V. I mited forms for proposals, with regulations to bo ob served, will be furnished at this office. THOMAS HILLHOUSE, Assistant Treasurer U. S. The regulations and form of proposals referred to in the notice are as follows : Purchase of bonds. Proposals must be for not less than five thousand dollars, and must state the kind of bonds offered, whether coupon or registered, and of what loan and issue. Proposals must specify the price desired, in currency, for the principal of the bonds only, without regard to the ac crued coin interest which will be paid on purchased bonds to the date of purchase. The payment will be in United States or national bank notes, as the convenience and condition of the Treasury may warrant. The interest on the purchased bonds will cease from the date of purchase. Bonds purchased must be delivered, in all cases, the day following the award. In case of failure to deliver the bonds within the time specified, they will be purchased in the open market for account of the sellers. Bonds will be received at this office and paid for, subject to examination by the Department at Washington, and if rejected the sellers will be required to substitute other ac ceptable bonds. Bonds rejected by the Department as counterfeit, or for fraudulent alterations or transfers, of whatever nature, will be retained, without prejudice to the right of the Depart ment to require the substitution therefor, by the seller, of other acceptable bonds. Proposals must be plain, specific, and free from any era sures or alterations likely to lead to misunderstanding. Proposals adverse to the interest of the Government will be rejected. Each proposal must contain a certified check for five per cent, of the amount offered. When proposals are rejected, the checks will be returned as soon as the awards are deter mined upon. If proposals are accepted, the checks will be returned on completion of the delivery of the bonds. In all proposals for the sale of bonds, it must be distinctly stated that they are made subject to the foregoing regula tions and conditions. CHAP. IV. J REDEMPTION OF BONDS. ffj Suitable forms will be furnished on application at this office. Sales of gold. Proposals must be for sums not less than five thousand dollars. Payment maj r be made in lawful money or three per cent. certificates. Each proposal must contain a certified check for five per cent, of the amount bid for. Proposals adverse to the interest of the Government will be rejected. The proposals will be opened at 12 M. on the days an nounced for purchases and sales. The right is reserved to accept more or less than the amount advertised for, either of bonds or gold. Form of proposal. NEW YORK, , 187. Form of proposal. To the ASSISTANT TREASURER U. S., New York. SIR : In accordance with the terms of your advertisement, and subjected to the annexed conditions, the following offer - is submitted. Very respectfully. . Proposals when opened are immediately telegraphed to the secretary deter- Secretary of the Treasury at Washington, and the amount ^InTpT* f to be sold or purchased on each occasion is decided by him chases on each and telegraphed back to the Assistant Treasurer, who an nounces the same at once. 3. PAYMENT AND REDEMPTION OF BONDS. In the bonds of the United States a distinction is made Distinction be- between "redeemable" and " payable." They are "re- ^iT deemable" when the Government has the option to pay able." them or to let them remain outstanding with the interest running thereon, and "payable" when they are fully ma tured and payable on presentation at the Treasury, at which time they cease to bear interest. Some bonds are redeem able at the pleasure of the Government after a date fixed 76 REDEMPTION OF BONDS. [CHAP. V. Payment of ma tured bonds. Calling in 5-20 bonds for re demption. Payment ol frac tions of coupons on called bonds. therein, and some between certain stated times at the ex piration of which they become payable, and others are pay able at a fixed day certain, as stated in the account of the several outstanding loans in Chapter I. When the principal of any bonds becomes payable, either by maturity of the bonds or by reason of their being called in for redemption, they are paid only by the Treasurer of the United States at Washington, to whom they must be forwarded, and who pays the same in coin or in coin checks on the Assistant Treasurer at New York city, as the parties presenting the bonds desire. The act of July 14, 1870, chapter 256, for refunding the national debt, makes the following provisions for calling in the five-twenty bonds for redemption: SEC. 4. And be it further enacted, Tbat the Secretary of the Treasury is hereby authorized, with any coin in the Treasury of the United States which he may lawfully apply to such purpose, or which may be derived from the sale of any of the bonds, the issue of which is provided for in this act, to pay at par and cancel any six per cent, bonds of the United States of the kind known as five-twenty bonds, which have become or shall hereafter become redeemable by the terms of their issue. But the particular bonds so to be paid and canceled shall in all cases be indicated and specified by class, date, and number, in the order of their numbers and issues, begin ning with the first numbered and issued, in public notice to be given by the Secretary of the Treasury, and in three months after the date of such public notice the interest on the bonds so selected and advertised to be paid shall cease. By the first three calls under this law the three months notice fixed for redemption of the bonds expired before the coupons thereon for the current six months became payable, so that to each bond there was one coupon upon which only a fraction of the nominal amount was due. These coupons are often detached by the holders of the bonds and pur chased by dealers at their face value without either party noticing the fact of the bonds being called in for redemption. This must occur in like manner in future calls, and in order to prevent persons from being defrauded by such errors, and to save the rights and equities of all parties buy- CHAP. V.] MONTHLY DEBT STATEMENT. 77 ing and selling coupons, the Secretary of the Treasury has made the following regulations: When coupons, detached from bonds that have heen called in for redemption, are presented for payment, the Depart ment will pay such portion of the interest specified in such coupons as had accrued at the day fixed in the call for the redemption of the bonds, and no more, unless the party presenting them claims payment of their nominal value., in which case the Department will retain the coupons until the bonds from which they were detached shall have been pre sented, and the conflicting claims adjusted. When a called bond is presented for redemption, from which a coupon, maturing after the day fixed in the call for such redemption, shall have been detached, the nominal value of such coupon shall be deducted from the sum due upon the bond, unless the coupon shall have been paid as above ; the surn thus deducted to be retained to await the presentation of the coupon and a settlement. The bonds of the Funded Loan, all of which are redeem- calling in and able at the pleasure of the United States after a fixed time, P J^Ln when called in for payment, are required by law to be called to begin with in reverse order to the five-twenty bonds ; that is, beginning with those last issued and numbered, so that the bond first issued will be last paid. In other respects the same rules apply alike to each class of bonds. For the law see page 9. 4. MONTHLY DEBT STATEMENT. On the first day of each month the Secretary of the Treas- contents of ury publishes a complete, carefully prepared, and thoroughly accurate statement of the whole public debt, as it appears upon the books of the Department on that day, setting forth First. DEBT BEARING INTEREST IN COIN, under which is given the title of each outstanding loan not matured, dates of acts of authorization, rate of interest, when the principal is re deemable and payable, times of payment of interest, amount of registered bonds, amount of coupon bonds, total, interest due and unpaid, and accrued interest. 78 MONTHLY DEBT STATEMENT. [CHAP. V. Second. DEBT BEARING INTEREST IN LAWFUL MONEY, includ ing the three per cent, certificates, navy pension fund, and certificates of indebtedness of 1870. Third. DEBT ON WHICH INTEREST HAS CEASED SINCE MATURITY. Under this head are included the balances of all loans ma tured or called in for redemption and not presented for pay ment, specifying each by the title of the loan, except those matured prior to 1837, which are combined in one item. Fourth. DEBT BEARING NO INTEREST, giving the amount of United States notes, fractional currency, coin certificates, certificates of deposit, and unclaimed interest. To which is added a RECAPITULATION, with a statement of the amount of coin and currency in the Treasury, the amount of reduction of the debt during the preceding month and other periods of time, and an account of BONDS ISSUED TO THE PACIFIC RAILWAY COMPANIES. circulation of This monthly debt statement is printed on sheets and for- war ded by mail to all journalists, bankers, brokers, and other persons in this country and Europe who request copies, or who are known to desire them, as well as to Government officials at home and abroad, for distribution, and is so ex tensively circulated throughout the United States that every citizen may easily know each month the exact condition of the national debt. CIIAP. VI ] PAYMENT IN COIN. 79 CHAPTER VI. OBLIGATION TO PAY PRINCIPAL AND INTEREST IN COIN; SINK- ING FUND AND TAXATION OF BONDS. 1. Payment in coin. 2. Sinking fund. 3. Taxation of United States bonds and other obligation 1. PAYMENT IN COIN. All the bonds of the United States, both coupon and Terms of the registered, of loans mentioned in Chapter I, as well as b of other loans heretofore paid in coin, express on the face thereof the promise of the Government to pay a certain amount of dollars with interest at the rate stated, without in any case specifying what kind of dollars are intended thereby, or in what money, whether coin or currency, either the principal or interest is payable. Of the loans created before the passage of the act of Loans before February 25, 1862, chapter 33, which first authorized the Feb y as, wca issue of legal-tender notes, payment could never have been contemplated at the time of negotiation in any dollars other than coin, as none other then formed the currency of the country which public or private creditors were obliged to accept. The language of the Supreme Court of the United States, in Bank v. Supervisors, (7 Wallace, 26,) is as appli cable to these bonds as to the notes to which it refers: " Every one of them expresses upon its face an engage ment of the nation to pay to the bearer a certain sum. The dollar note is an engagement to pay a dollar, and the dollar intended is the coined dollar of the United States ; a certain quantity in weight and fineness of gold or silver, authenti cated as such by the stamp of the Government. No other dollars had before been recognized by the legislation of the national Government as lawful money." 80 PAYMENT IN COIN. (CiiAi-. VI, Under the net of The act of February 25, 1802, section 1, authorizing the issue of United States notes, provided that they should be receivable in payment of "all claims and demands against the United States of every kind whatsoever except for in terest upon bonds and notes_, which shall be paid in coin ;" and that they should be "lawful money and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest as aforesaid." The subsequent laws, increasing the issue of notes and making them in like manner a legal tender, contain the same exceptions. The same act, by section 2, authorized the issue of five hundred millions dollars of bonds, "Five-twenties of 1862," and, by section 5 enacted, that the duties on imports should be paid in coin, part of which should be set aside as a spe cial fund, to pay in coin the interest on the bonds and notes of the United States and to establish a sinking-fund for the purchase or payment of the public debt. -under other The act of March 3, 1863, chapter 73, authorizing the loan of that date, expressly provided that the principal and interest of the bonds issued thereunder should be payable in coin; and so did the act of March 3, 1864, chapter IT, under which the "Ten-forty" loan and the "Five-twenty loan of March, 1864," were issued. The act of June 30, 1864, chapter 172, which authorized the "Five-twenty loan of June, 1864," provided that the interest should be payable in coin, without any mention of what kind of money the principal should be payable in. The act of March 3, 1865, chapter 77, under which were issued the "Five-twenties of 1865" and all the "Consols of 1865, 1867, and 1868," authorizing the issue of both bonds and treasury notes, provided that the "principal or interest, or both, may be made payable in coin or in lawful money;" "that the rate of interest on any such bonds or treasury notes, when payable in coin, shall not exceed six per centum per annum ; and when payable in currency shall not exceed 7y 3 Q- per centum per annum, and the rate and character of interest shall be expressed on all such bonds Ciwr. VI.] PAYMENT IN COIN. Kl or treasury notes." The bonds issued by authority of each of these acts were made payable in dollars, both principal and interest, without specifying coin or currency, while the treasury notes were invariably made payable on the face thereof in currency or lawful money. Thus the construction of the Treasury Department, con- cortemporane- temporaneous with the issue of the bonds, seems to have OU5 " 8t ctio - been that, when not otherwise expressly provided in the bonds themselves, both the principal and interest were payable in coin; and this construction has been strictly followed and maintained by the Government by the prompt and faithful payment of every such bond in coin at maturity. And the question has been further settled by legislation, so far as subsequent legislation can affect it, by the passage of a law, which was the first act of a general nature signed by President Grant upon his accession to the Presidency, only fourteen days after his inauguration, and was an emphatic expression of the sentiment of the people of the country, uttered by a new Congress then recently elected and just commencing its first session. The following is a copy of the law : ACT OF 1869, CHAPTER 1. AN ACT TO STRENGTHEN THE PUBLIC CREDIT. Be it enacted by the Senate and House of Representatives Act to strengthen of the United States of America in Congress assembled, That the P nblic credit - in order to remove any doubt as to the purpose of the Gov ernment to discharge all just obligations to the public cred itors, and to settle conflicting questions and interpretations of the laws by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin or its equivalent of all the obligations of the United States not bearing interest, known as United States notes, and of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money or other currency than gold and silver. But none of said interest-bearing obligations rot already due shall be redeemed or paid before maturity unless at such time United States notes shall be convertible into coin at the option of the holder, or unless at such time 6 82 SINKING FUND. [CHAP. VI. bonds of the United States bearing a lower rate of interest than the bonds to be redeemed can be sold at par in coin. And the United States also solemnly pledges its faith to make provision at the earliest practicable period for the redemption of the United States notes in coin. J. Gr. ELAINE, Speaker of the House of Representatives . SCHUYLER COLFAX, Vice President of the United States and Pres ident of the Senate- Approved March 18, 1869. U. S. GRANT. Funded Loan ex- To avoid all possible question as to the meaning of the d l lars mentioned in the " Funded Loan," the act of July 14, 18*70,, which authorized its issue, expressly provides that the bonds shall be redeemable in coin at its then standard value; that the interest shall be payable in sucli coin, and that those conditions shall be set forth and expressed upon the face of the bonds. The obligation to pay in coin of a fixed standard value, being thus expressed in the law and in all the bonds themselves, enters into and forms part of the original contract with the holders of these securities, and can never be questioned. SINKING FUND. of -Confess, This fund is required to be maintained by the following provisions of the act of February 25, 1862: SEC. 5. And be it further enacted. That all duties on im ported goods shall be paid in coin, or in notes payable on demand heretofore authorized to be issued and by law re ceivable in payment of public dues, and the coin so paid shall be set apart as a special fund, and shall be applied as follows : First. To the payment in coin of the interest on the bonds .and notes of the United States. Second. To the purchase or payment of one per centum of the entire debt of the United States, to be made within each fiscal year after the first day of July^ eighteen hun dred and sixty-two, which is to be set apart as a sinking CHAP. VI.} SINKING FUND. 83 Fund not com- eneed during In wnr. fund, and the interest of which shall in like manner be ap plied to the purchase or payment of the public debt as the Secretary of the Treasury shall from time to time direct. Third. The residue thereof to be paid into the Treasury of the United States. Congress, by joint resolution of March 17, 1864, chapter 20, gave the Secretary of the Treasury permission to sell gold in the Treasury, but added a proviso that the obliga tion to create the sinking fund, according to the act of Feb ruary 25, 1862, should not be impaired. During the continuance of the war of the Rebellion, while the Government was still borrowing money, and was pay- ing old loans and creating new ones, no steps were taken to establish the sinking fund as such, but the coin in the Treasury was allowed to accumulate to about one hundred millions of dollars. Upon the coming in of the administration, of President First put in oper- Grant, in March, 1869, his Secretary of the Treasury, Hon. George S. Boutwell, immediately commenced the sinking fund, in literal compliance with the law of Congress. Within each fiscal year, which ends June 30, the Secre tary applies coin received from duties to the purchase of bonds to the amount of one per cent, of the entire debt of the United States. The bonds so purchased were at first all registered in the name of the Treasurer of the United States, in trust for the Government, arid were stamped with the words "Sinking Fund" on the face of each bond. The interest thereon was regularly collected in coin semi-annually and applied to the purchase of other bonds, which in like manner were added to the same fund. By section 6 of the refunding act of July 14, 1870, which is as follows, Congress required the bonds to be canceled: SEC. 6. And be it further enacted. That the United States bonds purchased and now held in the Treasury in accordance with the provisions, relating to a sinking fund, of section five of the act entitled u An act to authorize the issue of United States notes, and for the redemption or funding thereof, and for funding the floating debt of the United States." approved February twenty-filth, eighteen hundred r.onds purchased aro canceled. ^4 SINKING FUND. [CiiA?, VJ. and sixty-two, and all other United States bonds which have been purchased by the Secretary of the Treasury with surplus funds in the Treasury, and now held in the Treasury of the United States, shall be canceled and destroyed, a detailed record of such bonds so canceled and destroyed to be first- made in the books of the Treasury Department. Any bonds hereafter applied to said sinking fund, and all other United States bonds redeemed or paid hereafter by the United States, shall also in like manner be recorded, can celed, and destroyed, and the amount of the bonds of each class that have been canceled arid destroyed shall be de ducted respectively from the amount of each class of the outstanding debt of the United States. In addition to other amounts that may be applied to the redemption or payment of the public debt, an amount equal to the interest on all bonds belonging to the aforesaid sink ing fund shall be applied, as the Secretary of the Treasury shall from time to time direct, to the payment of the public- debt, as provided for in section five of the act aforesaid. And the amount so to be applied is hereby appropriated annually for that purpose out of the receipts for duties on imported goods. This was not an abandonment of the sinking fund, but only a different method of procedure in relation to it. Under the requirements of this act, all bonds purchased for this fund are canceled and destroyed, but an accurate account is kept thereof, and of all subsequent purchases for the same purpose, and of the semi-annual interest on the whole, as though the bonds were in existence. Fnn i how rmn Within each fiscal year coin received from duties to the amount of one per cent, of the entire debt of every kind, including bonds, notes, and all other obligations, and also coin equal to the amount of the interest on all the bonds previously purchased for the same purpose and canceled, is applied to the purchase of outstanding bonds, and although the bonds themselves, the mere evidences of indebtedness, are destroyed, the amount thereof is carried to the account of the sinking fund, which is thus kept up and treated as a solemn obligation of the Government. The account fixes and determines the amount of coin equal to that which would be the interest on all the bonds purchased therefor, and which must be by law, arid, in fact, is semi-annually ap- CHAP. VI. ] TAXATION OF BONDS. 85 plied to the purchase of other bonds for the same account, in addition to the amount of one per cent, of the entire debt. There have never been any trustees, managers, or com missioners of this fund, the whole business being done in the Treasury Department, under the direction of the Secretary of the Treasury, without cost or expense of any kind to the Government. It was deemed best to cancel and destroy the bonds themselves, rather than keep them in existence in the custody of the Treasurer ; the obligation of the Government to use an amount of coin equal to the interest thereon, in the purchase or payment of other bonds, being as well evidenced by the books of the Department as by printed securities, and the danger of reissue being thereby avoided. The great revenues of the country in excess of the expend itures have enabled the Secretary to purchase bonds much more extensively than the sinking-fund law absolutely re quires, and the debt has been more rapidly reduced than by the operation of that fund alone. But the sinking fund itself will extinguish the entire win extinguish national debt in about thirty years, or soon after the close of the nineteenth century, the exact time depending upon the price at which the purchases may be made in future. If the Government should at any time be obliged to pay a large premium, as it has done heretofore to extinguish former debts, which premium in some cases has exceeded twenty per cent, in coin, the operation of the sinking fund will be somewhat less effective than it has been in the past. The Government must, under this law, continue to be a regular purchaser of its bonds, thus making a constant, well known, and certain market for the same. 3. TAXATION OF UNITED STATES BONDS AND OTHER OBLIGATIONS. It was decided by the Supreme Court in the year 1829, Decisions of su- before there were any statute provisions on the subject,, in the P reme Court - case of Weston v. The City Council of Charleston; (2 Peters, 449,) that a tax by a State on United States stock is uncon stitutional and void. Chief Justice Marshall, in giving the 86 TAXATION OF BONDS. [CHAP. VI. opinion of the court, says: "The tax on Government stock is thought by this court to be a tax on the contract, a tax on the power to borrow money on the credit of the United States, and consequently repugnant to the Constitution, 7 and that principle is recognized in the case of the Bank of Commerce v. New York City, (2 Slack, 620,) and in other cases. Taxation of A tax by a State on State banks, upon a valuation equal bondl h ldinS to tlie amount of tneir capital stock paid in or secured to be paid in, was decided to be a tax on the property of the institution, and where that property consists of stocks of the Federal Government the law laying the tax is held void. (Bank of Commerce v. Neio York City, 2 Black, 620; Ba di Tax Case, 2 Wallace, 200, explained in Provident Institu tion v. Massachusetts, 6 Wallace, 629.) Taxation of But national banks may be taxed by States without regard i.anks whose cap- t t] f t t] t t f th ir ^pital is invested in United tal is invested in J United states States bonds, under the provisions of the national banking law of June 3, 1864, section 41. (See notes to that section.) savings banks A State law, taxing savings banks a percentage on the tilSVdep^ts 00 avera g e amount of their deposits, although a portion of the although invest- same is invested in securities of the United States, is a tax states securities on tne franchise of the bank and not on its property, and so is valid. (Society for Savings v. Coite, 6 Wallace, 594; Provident Institution v. Massachusetts, 6 Wallace, 611.) Laws expressly The act of February 25, 1862, chapter 33, section 2, ex- ^d&^teTobngl pressly provides that "all stocks, bonds, and other securi- t ions from tax- ties of the United States held by individuals, corporations, ation by State au- . ,. .,-, ,-, TT ., -, , thority. or associations, within the United States, shall be exempt from taxation by or under State authority;" the act of June 30, 1864, chapter 172, section 1, that "all bonds, treasury notes, and other obligations of the United States shall be exempt from taxation by or under State or municipal author ity ;" and several other acts contain similar provisions, raited states The Supreme Court, in the case of Bank v. Supervisors, notes exempt ^ ^/^ 2 6,) decided that United States notes or Wai- from taxation. V j-^gw* tender notes are obligations within the meaning of the acts exempting United States obligations from State arid muni cipal taxation. CHAP. VI.] TAXATION OF BONDS. 87 As to all bonds and securities of the United States., except united states those of the Funded Loan, the exemption is only from taxa- tax^bond^ tion by Si ate or municipal authority, and not by the Federal Government ; and the latter for many years did lay an in come tax upon the interest received by its citizens on such securities, and has the right to do so again. J5ut the bonds of the Funded Loan are by the express Except thos^r ,. , n T i -i j ir>-r/-v i i ji i r> the Funded T.A;in terms of the act ot July 14, 1870, and by the language ot the bonds themselves, "exempt from the payment of all taxes or duties of the United States, as well as from taxa tion in any form, by or under State, municipal, or local authority." This exemption is as extensive as the legisla tive power can make it, and entering into the original contract, by being incorporated into the act under which the bonds are issued and into the language of the bonds also, secures to the holders of the bonds of this loan, unlike those of any other loan ever issued by the Government, the full amount of interest thereon, without deduction by taxa tion in any form whatever, either by the States or the national Government itself. ESTABLISHED POL^Y. [CHAP. VIL CHAPTER VII. ESTABLISHED POLICY OF THE COUNTRY, COEVAL WITH THE CON STITUTION, TO MAINTAIN THE PUBLIC CREDIT, TO GRADUALLY PAY THE PRINCIPAL OF ALL LOANS, AND TO AVOID A PERMA NENT NATIONAL DEBT. I. Extinguishment of the public debt. 2-9. Extracts from messages of the Presidents, lo. The country free from public debt. 11. Premiums paid to redeem debts before maturity. 12. Reduction of the existing debt. 13. List of loans heretofore contracted. 1. EXTINGUISHMENT OF THE PUBLIC DEBT. The following extracts from the messages of Presidents of the United States, who for the time being generally rep resent the prevailing sentiment of the people who elect them, indicate the policy of the country adopted in the early days of the national Government, and ever since steadily pursued, for a period of nearly a century, to main tain faithfully the public credit, not only by prompt pay ment of the interest, but by the gradual extinguishment of the principal also of all national loans, whether contracted under ordinary or extraordinary circumstances, or for usual and permanent or temporary and special purposes. Washington, 17WX 2. WASHINGTON S SECOND ANNUAL MESSAGE TO CONGRESS, DECEM BER 8, 1790. " Allow me, moreover, to hope that it will be a favorite policy with you not merely to secure a payment of the in terest of the debt funded, but as far and as fast as the grow ing resources of the country will permit ,to exonerate it of the principal itself. The appropriations you have made of CHAP. VII.] EXTRACTS FROM MESSAGES. 89 the western lands explain your disposition on this subject, and I am persuaded that the sooner that valuable fund can be made to contribute, along with other means, to the actual reduction of the public debt, the more salutary will the measure be to every public interest as well as the more satisfactory to our constituents." 3. WASHINGTON S FOURTH ANNUAL MESSAGE, NOVEMBER 6, 1792. "I entertain a strong hope that the state of the national Washington, 1792. finances is now sufficiently matured to enable you to enter upon a systematic and effectual arrangement for the regular redemption and discharge of the public debt, according to the right which has been reserved to the Government. No measure can be more desirable, whether viewed with an eye to its intrinsic importance, or to the general sentiment and wish of the nation." 4. WASHINGTON S SIXTH ANNUAL MESSAGE, 1794. "The time which has elapsed since the commencement of Washington, 1794 our fiscal measures, has developed our pecuniary resources so as to open the way for a definitive plan for the redemption of the public debt. It is believed that the result is such as to encourage Congress to consummate this work without de lay. Nothing can more promote the permanent welfare of the nation, and nothing would be more grateful to our con stituents. Indeed, whatever is unfinished of our system of public credit, cannot be benefited by procrastination ; and, as far as may be practicable, we ought to place that credit on grounds which cannot be disturbed, and to prevent that progressive accumulation of debt which must ultimately endanger all governments." 5. WASHINGTON S SEVENTH ANNUAL MESSAGE, 1795. "Whether measures may not be advisable to reinforce the Washington, nos. provision for the redemption of the public debt, will natu rally engage your examination. Congress have demonstrated their sense to be, and it were superfluous to repeat mine, that whatsoever will tend to accelerate the honorable extinc- 90 EXTRACTS FROM MESSAGES. [CHAP. VII tion of our public debt accords as much with the true inter ests of our country as with the general sense of our constit uents." 6. WASHINGTON S EIGHTH ANNUAL MESSAGE, 1796. Washington, HOG. "A reinforcement of the existing provisions for discharg ing our public debt was mentioned in my address at the opening of the last session. Some preliminary steps were taken toward it, the maturing of which will, no doubt, engage your zealous attention during the present session. I will only add, that it will aiford me a heartfelt satisfac tion to concur in such further measures as will ascertain to our country the prospect of a speedy extinguishment of the debt. Posterity may have cause to regret if from any motive intervals of tranquillity are left unimproved for accelerating this valuable end." 7. WASHINGTON S FAREWELL ADDRESS. Washington, 1706. u As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible, avoiding occasions of expense by cultivating peace, but remembering, also, that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it; avoiding likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertions in time of peace to discharge the debts which unavoidable wars have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear." 8. PRESIDENT JOHN ADAMS S FIRST ANNUAL MESSAGE, 1797. president John "Since the decay of the feudal system, by which the pub- Adams, 1797. Y IG defense was provided for chiefly at the expense of indi viduals, the system of loans has been introduced; and as no nation can raise within the year by taxes sufficient sums for defense and for military operations in time of war, the sums loaned and debts contracted have necessarily become the subjects of what have been called fumVng systems. CHAP. VII.] FREE FROM DEBT. 91 The consequences arising from the continued accumulation of public debts in other countries, ought to admonish us to be careful to prevent their growth in our own case. The national defense must be provided for as well as the sup port of Government, but both should be accomplished as much as possible by immediate taxes, and as little as possi ble by loans." 9. PRESIDENT JOHN QUINCY ADAMS S THIRD ANNUAL MESSAGE, 1827. "The deep solicitude felt by our citizens of all classes President j. Q. throughout the Union for the total discharge of the public Adams > 1827 - debt, will apologize for the earnestness with which I deem it my duty to urge this topic upon the consideration of Con gress of recommending to them again the observance of the strictest economy in the public funds." 10. THE COUNTRY FREE FROM PUBLIC DEBT. President Jackson, in his seventh annual message to President jack- Congress, December, 1835, made the following announce- son 1835 - ment : Since my last annual communication all the remains The country tree of the public debt have been redeemed, or money has been from deht - placed in deposit for this purpose, whenever the creditors choose to receive it. All the other pecuniary engagements of the Government have been honorably and promptly ful filled, and there will be a balance in the Treasury at the close of the present year of about nineteen millions of dollars." In 1834 and 1835 the country was entirely out of debt, ceiebratica of and in honor of the event a celebration was had in Wash- theevent - ington on the 8th of January, 1835, the anniversary of the battle of New Orleans, at which were present about two hundred and fifty of the representative men of the country. Andrew Jackson, then President, was not himself present, but he sent the following sentiment : " The payment of the Public Debt : Let us commemorate it as an event which gives us increased power as a nation and reflects lustre on our Federal Union, of whose justice, fidel ity, and wisdom, it is a glorious illustration." 90 EXTRACTS FROM MESSAGES. [CHAP. VII tion of our public debt accords as much with the true inter ests of our country as with the general sense of our constit uents." WASHINGTON S EIGHTH ANNUAL MESSAGE, 1796. Washington, HOG. "A reinforcement of the existing provisions for discharg ing our public debt was mentioned in my address at the opening of the last session. Some preliminary steps were taken toward it, the maturing of which will, no doubt, engage your zealous attention during the present session. I will only add, that it will afford me a heartfelt satisfac tion to concur in such further measures as will ascertain to our country the prospect of a speedy extinguishment of the debt. Posterity may have cause to regret if from any motive intervals of tranquillity are left unimproved for accelerating this valuable end." 7. WASHINGTON S FAREWELL ADDRESS. Washington, HOG. a As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible, avoiding occasions of expense by cultivating peace, but remembering, also, that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it; avoiding likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertions in time of peace to discharge the debts which unavoidable wars have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear." 8. PRESIDENT JOHN ADAMS S FIRST ANNUAL MESSAGE, 1797. president John "Since the decay of the feudal system, by which the pub- s, 1797. \{ c defense was provided for chiefly at the expense of indi viduals, the system of loans has been introduced; and as no nation can raise within the year by taxes sufficient sums for defense and for military operations in time of war, the sums loaned and debts contracted have necessarily become the subjects of what have been called funcVng systems. CHAP. VII.] FREE FROM DEBT. 91 The consequences arising from the continued accumulation of public debts in other countries, ought to admonish us to be careful to prevent their growth in our own case. The national defense must be provided for as well as the sup port of Government, but both should be accomplished as much as possible by immediate taxes, and as little as possi ble by loans." 9. PRESIDENT JOHN QUINCY ADAMS S THIRD ANNUAL MESSAGE, 1827. "The deep solicitude felt by our citizens of all classes President j. Q. throughout the Union for the total discharge of the public Adams, 1327. debt, will apologize for the earnestness with which I deem it my duty to urge this topic upon the consideration of Con gress of recommending to them again the observance of the strictest economy in the public funds." 10. THE COUNTRY FREE FROM PUBLIC DEBT. "President Jackson, in his seventh annual message to President Jack- Congress, December, 1835, made the following announce- son, isss. ment : Since my last annual communication all the remains The country tree of the public debt have been redeemed, or money has been from debt - placed in deposit for this purpose, whenever the creditors choose to receive it. All the other pecuniary engagements of the Government have been honorably and promptly ful filled, and there will be a balance in the Treasury at the close of the present year of about nineteen millions of dollars." In 1834 and 1835 the country was entirely out of debt, ceiebratica of and in honor of the event a celebration was had in Wash- theevenfc ingtori on the 8th of January, 1835, the anniversary of the battle of New Orleans, at which were present about two hundred and fifty of the representative men of the country. Andrew Jackson, then President, was not himself present, but he sent the following sentiment : The payment of the Public Debt : Let us commemorate it as an event which gives us increased power as a nation and reflects lustre on our Federal Union, of whose justice, fidel ity, and wisdom, it is a glorious illustration." 92 REDUCTION OF EXISTING DEBT. [CHAP. VIL SB rpius revenue James K. Polk, afterwards President of the United States, then first vice president of the occasion, in his remarks, said: "The day of the final payment of the national debt must be a day of national rejoicing. The only national debt that now remains is that debt of gratitude we owe to those who established and those who sustained our national freedom. We hail the extinguishment, at so early a pe riod, of the public debt created by two wars, the one to purchase, the other to preserve and protect public liberty, as the result of a wise, economical, and patriotic adminis tration of public affairs." On the first day of January, 1837, there was in the Treasury a balance of 137,327,252 69; and of that amount, by an act of Congress passed June, 1836, the sum of $28,101,644 91 was apportioned to and actually distributed among the several States. 11. Premiums paid for bonds. PREMIUMS PAID TO REDEEM DEBTS BEFORE MATURITY. On several occasions the Government ha.s purchased its outstanding debts before maturity at large premiums in in coin. In 1842 at an average premium of lo^j- per cent. ; in 1846 at T-,Vir P er cent -5 in 184 ^ at 20 iVo P er cent -J and in 1848 at 20,-^ average. In some cases bonds were pur chased at a premium as high as 23 per cent, in coin. 12. Reduction of ex- igtitg debt. REDUCTION OF THE EXISTING DEBT. The public debt, as represented on the books of the Treas ury Department, exclusive of Pacific Railway bonds and of accrued interest, (which until 1869 was not included in the debt statement.) and deducting therefrom the cash in the Treasury, reached its highest point March 1, 1866, when it stood at 2,707,856,000 22. Immediately after the close of the Rebellion it was re duced by the proceeds of the sale of materials of war ; and since then it has been further reduced by the surplus revenue CHAP. VII. 1 LIST OF LOANS. 93 of the Government until, on the first of September, 1872, it stood, including accrued interest and interest due and un paid, less cash in the Treasury, at $2,177,322,020 55 ; show ing a reduction in five and a half years of $564,599,335 35. By the operation of the Sinking Fund, the deht must continue to be reduced annually till it is finally extin guished. Seepage^, President Grant, in his inaugural address, March 4, 1869, said, in relation to the debt: "A great debt has been contracted in securing to us and to our posterity the Union. The payment of this, principal and interest, as well as the return to a specie basis as soon as it can be accomplished without material detriment to the debtor class or to the country at large, must be pro vided for. To protect the national honor, every dollar of Government indebtedness should be paid in gold, unless otherwise stipulated in the contract." 13. LIST OF ALL LOANS HERETOFORE CONTRACTED. There can be no better evidence of the policy of the Li.stofaiiif.ans country than the following complete list of all debts which have been -contracted by the Government from 1776 to the present time, all of which have been fully paid and canceled or called in for payment, except so much as remains of those incurred since 1858, contracted mostly on account of the Rebellion, and which have been rapidly reduced since the establishment of peace, as fully set forth in the fore going pages : Title of Loan. Act of authorization. Amount issued. Farmers General of Franco December 23 1776 $181 500 GO Loan of 18 million livres, France.. J " 1781 from Spain December 23, 1776, ) December 3, 1777, f September 28, 1779 .. 3,267,000 00 174017 13 " lOmillion livres from France " 6 " " " October 26, 1779 1,815,000 00 1,089000 00 Balance of supplies due France ii it 24 332 86 Loan of 1782. Holland... 2.000.000 00 94 LIST OF LOANS. [CHAP. VII. Title of Loan. Act of authorization. Amount issued. Loan of 1784 Holland October 27 1779 800 000 00 1787 400000 00 1 1788 " . .. . (> .< 400000 00 1 1790 ." . . August4andl2 1790 1,200000 00 March 1791 Holland.., . 1 000 000 00 September 1791..." .1 II II 2,400,000 00 November, 1791, Antwerp . U II II 820000 00 1 December, 1791, Holland... II II U 1,200.000 00 1792 II II 11 1 180000 00 1 1793 II II 400 000 00 1794 U U II 1 200 000 00 Debts due foreign officers May 8 1792 186988 78 Debts due from old government 502465 32 Temporary loans of 1789 and 1790 246,608 81 Six per cent stock of 1790 August 4 and 12 1790 29507522 78 Deferred six per cent, stock 14622600 98 Three per cent stock . U II II 19 094 231 62 Subscription loan of 1791, B. U. S.... Temporary loan, B k of N. America.. February 25, 1791.... March 3 1791 2,000,000 00 156 595 56 " 1792, B. U. S " 1793 " " 1794, B kofN.Y.. March, 1794, B.U.S May 2, 1792 February 28, 1793. .. March 20, 1794 400,000 00 800,000 00 200,000 00 1 000 000 00 " June ". " June 9, 1794 1,000000 00 Dec " ".... December 18 1794 .. 2,000,000 00 Feb., 1795....".... February 21, 1795... 800000 00 1 March A " ".... " B " March 3, 1795 500,000 00 500 000 00 C " U U 500 000 00 Five and J per cent, stock of 1795 II II 1 848 900 00 Four and ^ per cent stock of " 1 II 176000 00 Temporary loan, Bank of New York.. 1798 B U. S. May 31, 1796 March 3 1795 320,000 00 ?00 000 00 Six per cent, stock of 1796 . . . May 31 1796 80 000 00 Navy six per cent, stock June 30 1798 711 700 00 Eight per cent, stock of 1798 July 16 1798 5 000 000 00 Eight per cent, stock of 1800 May 7 1800 1 481 700 00 Louisiana six per cent, stock. . . November 10 1803 1 1 250 000 00 Exchanged six percent. stock of 1807.. Converted..." " " ". February 11, 1807 6,294,051 12 1 859 850 70 Temporary loan of 1810 May 1 1810 2 750 000 00 Six per cent, stock of 1812 March 14, 1812 8,134,700 00 Temporary loan of 1812 2 150000 00 Treasury notes of 1812 June 30 1812 5 000 000 00 Exchanged six per cent, stock of 1812.. Six per cent, loan of February, 1813.. Treasury notes of 1813 July 6, 1812 February 8, 1813 February 25 1813 2,984,746 72 18,109,377 43 5 000 000 00 Six per cent, loan of August, 1813... August 2, 1813 8498581 9- r > Treasury notes of March 1814 March 4 1814 10000000 00 Ten million loan of 1814 March 24, 1814 9919476 25 Six " " " 5 384 134 87 Undesignated six per cent, stock of 1814 U II 746 403 31 Mississippi stock March 31 1814 4 " S 151 12 Temporary loan of 1814 November 15 1814 1 450 000 00 Treasury notes, December, 1814 Direct tax loan.... December 26, 1814.... January 9. 1815.... 8,318,400 00 200.000 00 CHAP. VII. ] LIST OF LOANS. Title of Loan. Date of authorization. Amount issued. Temporary loan, February, 1815 Seven per cent, stock of 1815 Treasury notes of 1815 February 13, 1815.... February 24, 1815.... February 24, 1815.... $225,000 00 9,070,386 00 4,969,400 00 3 392 994 00 Small treasury notes Treasury note six per cent, stock Temporary loan March, 1815 Six per cent, stock of 1815 u 1,505,352 18 1,150,000 00 12,288,147 56 7,000,000 00 999,999 13 2,000.000 00 4,735,296 30 56,704 77 5,000,000 00 4,454,727 95 5,000,000 00 1,539,336 16 10,000,000 00 5,709,810 01 3,857,276 21 7,114,251 31 7,529.062 75 5,672,976 88 7,959,994 83 8,000,000 00 3,025,554 89 1,806,950 00 7,004,231 35 26,122,100 00 7,687,800 00 4,999,149 45 303,573 92 28,207,000 00 233,075 00 16,000.000 00 5,000,000 00 20,000.000 00 20,000,000 00 7,022,000 00 10,010,900 00 18,415,000 00 35 409 350 00 March 3 1815 Subscription loan to Bank U. S Five per cent stock of 1820 April 10, 1816 May 15 1820 Six Five " ".., 1821 Exchanged five per cent, of 1822 Four and \ per cent, stock May 24, 24.. Exchanged four and \ per cent, stock.. Four and \ per cent, stock May 26, 24. Exchanged four and \ per ct. stock 1825 ". March 3, 1821... April 20, 1822 May 24, 1824 May 26 1824 .... March 3, 1825 Treasury notes of 1837 October 12, 1837 May 21 1838 1838 1839 March 2 1839 1840 " 31,1840 1841 February 15, 1841 July 21, 1841 Loan of 1841 Treasury notes of January, 1842 Loan of 1842 j January 31, 1842 July 21, 1841, April { 15, 1842 j August 31,1842 March 3 1843 Treasury notes of August, 1842 " 1843 Loan of 1843 Treasury notes of January, 1846 July 1846 January 28, 1846 July 22 1846 Loan of 1846. Mexican indemnity stock Loan of 1847 August 10,1846 January 28, 1847 February 11, 1847 March 31, 1848 September 9, 1850 December 23, 1857.... June 14, 1858 June 22, 1860 Bounty land scrip Loan of 1848 Texan indemnity stock Treasury notes of 1857 .. . Loan of 1858. Loan of 1860 Treasury notes of 1860 . . December 17, I860.... February 8, 1861 Loan of February 1861 (81 s) Treasury notes of 1861 June 22 1860 i. March 2, 1861 Sixty days Treasury notes Oregon war debt u 1,090,850 00 60,000.000 00 189,318,100 00 140,094,750 00 46,303,129 17 514,771,600 00 432,757,601 00 131,497,853 62 Old demand notes | July 17, Aug. 5, HI. \ and Feb. 12, 1862 j Loan of July and August, 1861, (81 s). Seven-thirties of 1861 Subscription loan Nov 16 1861 K Five-twenties of 1^ ^ February 25, 1862.... Feb. 25. July 11, 62 j March 3/1863.... j Feb. 25, Mar. 17/62 j June 30,1864 j United Spates notes | Temporary loan -j LIST OF LOANS. [ClIAP. VI 1. Title of Loan. Date of authorisation. Amount ji-fUit. 1 . Certificates of indebtedness | Mar. land 17, 1862, 1 236373000 00 Fractional currency ] and March 3, 63. j July 17, ; 62, Mar. 3, ) 43 179 650 03 Loan of 1863 (Si s) 63, June 30, 64. j March 3 1863 75 000 000 00 One-year notes of 1863 44 50 000 00 Two " " u 166 480 000 00 Compound interest notes Mar 3 63 June 30 64 217024 160 00 Coin certificates " (9 5) 50 392 180 00 Ten- forties of 1864 Five-twenties of March 1864 " 1864 196,117,300 00 3 882 500 00 June 1864 June 30 1864 125 561 300 OC Seven-thirties of 1864-1865 j June 30, 1864, Mar. ) 830000000 OC Five-twenties 65 consols 65 7 8. 3, 1865 J 958467900 OC Three per cent. certifieaies March 2 1867 65 230 000 OC Certificates of indebtedness, 1870 Funded loan of 1881 July 8,1870 July 14, 1870 678,362 41 200,000,000 OC In the foregoing list the amount set down to each of those items of indebtedness in which the certificates, notes, or cur rency were issued and reissued, is the largest amount out standing at any one time. PART II. THE NATIONAL BANKING LAWS OF THE UNITED STATES, WITH NOTES AND REFERENCES TO THE DECISIONS OF THE COURTS AND OPINIONS OF THE ATTORNEYS GENERAL THEREON. INTRODUCTORY OBSERVATIONS. The necessities of the Government, created by the great; Rebellion, brought into operation many powers conferred upon Congress by the Constitution,, which until that time had rarely or never been exercised, and new and extraordi nary legislation relating to the finances and financial con dition of the* country was enacted in order to supply the wants of the national Government. Previously to the year 1863 Congress had never inter fered with the banks of issue created by the several States, except in 1813 to levy, temporarily a small stamp tax on the notes of banks and bankers for the purpose of revenue, and in 1862 to prohibit all corporations and individual? from issuing notes of a fractional part of a dollar. In 1836 an act was passed providing that State banks conveniently located might be selected as depositories of public money, upon certain conditions therein prescribed: one of which was, that no bank so selected should issue bills of less denomination than five dollars. The " inde pendent treasury system," established by the acts of July 4, 1840, and August 6, 1846, superseded the employment of State banks as depositories. At the time of the adoption of the Constitution of the United States four State banks were in existence, one in each of the States of Maryland, Massachusetts, New York, and Pennsylvania, and the number went on increasing, until, in the year 1863, there were more than one thousand five hundred in the different States, each subject to the laws of the State by which it was incorporated, but substantially independent of any legislation of Congress. Congress twice chartered a bank of the United States, first in 1791 and again in 1816, but when the charter ex pired in 1836 it was not renewed, and Congress never after- 100 INTRODUCTORY OBSERVATIONS. wards enacted a law for the incorporation of banks, except some local banks in the District of Columbia,, over which it has exclusive jurisdiction, until the passage of the act of February 25, 1863, entitled c An act to provide a national currency secured by a pledge of United States stocks, and to provide for the circulation and redemption thereof." In order to introduce some changes in the law this act was the next year repealed, and a substitute enacted June 3, 1864, entitled u An act to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof;" which, with the amendments thereto, is printed in the following pages. Under the operation of these laws and the 9th section of the act of July 13, 1866, and the 2d section of the act of March 26, 1867, taxing the notes of State banks and of towns, cities, municipal corporations, and individuals, used ici circulation, nearly all the State banks have been con verted into national banks or gone out of existence, and those few which remain have ceased to issue notes for circu lation, finding it unprofitable to do so. All paper money has disappeared from circulation, except United States legal-tender notes and national bank notes. The number of national banks is now a little more than one thousand nine hundred, issuing their notes to the amount of about three hundred and forty millions of dollars. ACTS OF CONGRESS. ACT OF JUNE 3, 1864, CHAPTER 106. A.N ACT TO PROVIDE A NATIONAL CURRENCY SECURED BY A PLEDGE OF UNITED STATES BONDS, AND TO PROVIDE FOR THE CIRCULATION AND REDEMPTION THEREOF. CURRENCY BUREAU. Be it enacted by the Senate and House of Representatives currency Bnrpan of the United States of America in Congress assembled, That there shall be established in the Treasury Department a separate bureau, which shall be charged with the execution of this and all other laws that may be passed by Congress respecting the issue and regulation of a national currency secured by United States bonds. The chief officer of the said bureau shall be denominated comptroller of the Comptroller of the Currency, and shall be under the Currenc y- general direction of the Secretary of the Treasury. He shall be appointed by the President, on the recommendation of the Secretary of the Treasury, by and with the advice and consent of the Senate, and shall hold his office for the term of five years unless sooner removed by the President, upon reasons to be communicated by him to the Senate ; he shall receive an annual salary of five thousand dollars ; He shall have a competent de puty, appointed by the Sec- Deputy comp. retary, whose salary shall be two thousand five hundred troller< dollars, and who shall possess the power and perform the duties attached by law to the office of Comptroller during a vacancy in such office and during his absence or inability. He shall employ, from time to time, the necessary clerks cierks. to discharge such duties as he shall direct, which clerks shall be appointed and classified by the Secretary of the Treasury in the manner now provided by law. Within fifteen days from the time of notice of his appoint- oath and bond oi ment the Comptroller shall take and subscribe the oath of Com P trol!c>! 101 102 BANKING LAWS. of Deputy Comptroller. Neither to be in terested in banks. Seal of office, its use, &G. Rooms for office, raultp, &c. office prescribed by the Constitution and laws of the United States ; and be shall give to the United States a bond in the penalty of one hundred thousand dollars, with not less than two responsible sureties, to be approved by the Secretary of the Treasury, conditioned for the faithful discharge of the duties of his office. The Deputy Comptroller so appointed shall also take the oath of office prescribed by the Constitution and laws of the United States, and shall give a like bond in the penalty of fifty thousand dollars. The Comptroller and Deputy Comptroller shall not, either directly or indirectly, be interested in any association issuing national currency under the provisions of this act. SEC. 2. And be it further enacted, That the Comptroller of the Currency,, with the approval of the Secretary of the Treasury, shall devise a seal, with suitable inscriptions, for his office, a description of which, with a certificate of ap proval by the Secretary of the Treasury, shall be filed in the office of the Secretary of State with an impression thereof, which shall thereupon become the seal of office of the Comp troller of the Currency, and the same may be renewed when necessary. Every certificate, assignment, and conveyance executed by the Comptroller, in pursuance of any authority conferred on him by law, and sealed with his seal of office, shall be received in evidence in all places and courts what soever ; and all copies of papers in the office of the Comp troller, certified by him and authenticated by the said seal, shall in all cases be evidence equally and in like manner as the original. An impression of such seal directly on the paper shall be as valid as if made on wax or waler. SEC. 3. And be it further enacted, That there shall be as signed to the Comptroller of the Currency by the Secretary of the Treasury suitable rooms in the Treasury Building for conducting the business of the Currency Bureau, in which shall be safe and secure fire-proof vaults, in which it shall be the duty of the Comptroller to deposit and safely keep all the plates not necessarily in the possession of engravers or printers, and other valuable things belonging to his de partment; and the Comptroller shall from time to time BANKS, HOW FORMED. 103 furnish the necessary furniture, stationery, fuel, lights, and other proper conveniences for the transaction of the said business. UNITED STATES BONDS DEFINED. SEC. 4. And be it further enacted, That the term " United Definition of uni States bonds," as used in this act, shall be construed to as used^n this* mean all registered bonds now issued, or that may here- act- after be issued, on the faith of the United States by the Secretary of the Treasury, in pursuance of law. * BANKS, HOW FORMED. SEC. 5. And be it further enacted, That associations for Banking associa- carrying on the business of banking may be formed 1 by any ^ ns how fonr -- number of persons, not less in any case than five, who shall enier into articles of Association, which shall specify in gen eral terms the object for which the association is formed, and may contain any other provisions, not inconsistent with the provisions of this act, which the association may see fit to adopt for the regulation of the business of the association and the conduct of its affairs, which said articles shall be signed by the persons uniting to form the association, and a copy of them forwarded to the Comptroller of the Currency, to be filed and preserved in his office. SEC. 6. And be it further enacted, That the persons uniting organization cer to form such an association shall, under their hands, make tlflcates - an organization certificate, which shall specify First. The name assumed by such association, which name shall be subject to the approval of the Comptroller. , Second. The place where its operations of discount and 1. There is no limit to the aggregate amount of capital of banks which may be organized under this act. (Opinions of Attorneys General, vol. 11, page 33-1.) Any number of banks may be organized, with any amount of capital, not less to each bank than the minimum specified in section 7. But each bank must deposit bonds with the Treasurer of the United States, as required by section 16, whether it obtains circulation or not. And the aggregate circu lation of currency notes is limited to $354,000,000. (See section 22, and note 9.) There is no limit to the aggregate circulation of gold notes. (See Act of July 12, 1870, chapter 252, sections 3, 4, 5. 104 BANKING LAWS. to be acknowl edged. Copies of, when evidence. Amount of capi ta] stock re- qui -ed. deposit are to be carried on, designating the State, Terri tory, or District, and also the particular county and city, town, or village. 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 of them. Fifth. A declaration that said certificate is made to ena ble such persons to avail themselves of the advantages of this act. The said certificate shall be acknowledged before a judge of some court of record or a notary public, 2 and such cer tificate, with the acknowledgment thereof authenticated by the seal of such court or notary, shall be transmitted to the Comptroller of the Currency, who shall record and carefully preserve the same in his office. Copies of such certificate, duly certified by the Comp troller, and authenticated by his seal of office, shall be legal and sufficient evidence in all courts and places within the United States, or the jurisdiction of the Government thereof, of the existence of such association, and of every other mat ter or thing which could be proved by the production of the original certificate. CAPITAL STOCK REQUIRED. SEC. 7. And be it further enacted, That no association shall be organized under this act, with a less capital than one hundred thousand dollars, nor in a city whose popula tion exceeds fifty thousand persons^ with a less capital than two hundred thousand dollars : Provided, That banks with a capital of not less than fifty thousand dollars may, with the approval of the Secretary of the Treasury, be organized in any place the population of which does not exceed six thousand inhabitants. 2. In an action by a national bank, in which the certificate of the Comp troller is produced authorizing the bank to commence business, it is no objec tion to its legal existence that the acknowledgment of the organizaiion cer tificates was taken before a notary public who was one of the stockholders, That is a question for the Comptroller only. (Thatcher v. The West River National Bank, 19 Michigan, 196.) CORPORATE EXISTENCE, POWERS, &c. 105 CORPORATE EXISTENCE, POWERS, &C. SEC. 8. And be it further enacted, That every association when a corpora- formed pursuant to the provisions of this act shall, from the date of the execution of its organization certificate, he a body corporate, hut shall transact no business except such as may he incidental to its organization and necessarily preliminary, until authorized by the Comptroller of the Currency to com mence the business of hanking. Such association shall have power to adopt a corporate May adopt a seal seal, and shall have succession by the name designated in corporation for its organization certificate, for the period of twenty years twenty years, from its organization, unless sooner dissolved according to the provisions of its articles of association, or by the act of its shareholders owning two-thirds of its stock, or unless the franchise shall be forfeited by a violation of this act ; by such name it may make contracts, sue and be sued, 3 complain and May sue and be defend, in any court of law and equity, as fully as natural s persons; It may elect or appoint directors, and by its board of directors appoint a president, vice president, cashier, 4 and other officers, define their duties, require beads of them and fix the penalty thereof, dismiss said officers, or any of them, at pleasure, 6 and appoint others to fill their places; And exercise under this act all such incidental powers as what business shall be necessary to carry on the business of banking by d ay be transact * discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving de posits; by buying and selling exchange, coin, and bullion; by loaning money on personal security ; by obtaining, issu- 3. See section 50, and notes thereon. 4. The cashier is the financial officer, or the executive officer, through whom the whole financial operations of the bank are conducted. The directors may limit his authority as they deem proper, but this would not affect those to whom the limitations were unknown. His authority to do particular acts may be inferred from evidence as to the powers exercised by him, with the knowledge and acquiescence of the directors and the usage of other banks in the same city. (Merchants Bank v. State National Bank, 10 Wallace, 604. The Walcefield Bank v. Truesdall, 55 Barbour, 602.) 5. The directors may remove the president even before any by-laws are adopted. (Taylor v. Hutton, 43 Harbour, 195.) 106 BANKING LAWS. ing, and circulating notes according to the provisions of this act ; Transfer of stock. And its board of directors shall also have power to define and regulate "by by-laws, not inconsistent with the pro visions of this act, the manner in which its stock shall be transferred, 6 its directors elected or appointed, its officers appointed, its property transferred, its general business con ducted, and all the privileges granted by this act to associ ations organized under it shall be exercised and enjoyed ; And its usual business shall be transacted at an office or banking-house located in the place specified in its organiza tion certificate. Where to trans act business. Directors and president: r must each own ten shares and take official cath. DIRECTORS AND PRESIDENT. SEC. 9. And ~be it further enacted^ That the affairs of every association shall be managed by not less than five directors, one of whom shall be the president. Every director shall, during his whole term of service, be a citizen of the United States ; and at least three-fourths of the directors shall have resided in the State, Territory, or district in which such asso ciation is located one year next preceding their election as directors, and be residents of the same during their contin uance in office. Each director shall own, in his own right, at least ten shares of the capital stock of the association of which he is a director. Each director, when appointed or elected, shall take an oath that he will, so far as the duty devolves on him. diligently and honestly administer the affairs of such asso ciation, and will not knowingly violate, or willingly permit 6. A bank whose certificates of stock declare the stockholders entitled to a certain number of shares, transferable in person or by attorney on the books of the bank, and upon a surrender of the certificates, but not otherwise, and which permits a stockholder to transfer his shares without a surrender of his certificates, is liable for value of the same stock to a bona fide trans feree, who produces the certificates with a properly executed power of attor ney to transfer. (Bank v. Lanier, 11 Wallace, 369.) Banks have no valid liens on the shares of stockholders for debts due from them to the bank, even although the by-laws and the certificates of stock set forth such lien, unless the bank is authorized to make such a provision by the articles of association. (Rosenback v. Salt Springs National Bank, 35 Barbour, 495; Bank v. Lanier, 11 Wallace, 369.) DIRECTORS AND PRESIDENT, 107 to be violated, any of the provisions of this act, and that lie is the bona fide owner, in his own right, of the number of shares of stock required by this act, subscribed by him, or standing in his name on the books of the association, and that the same is not hypothecated, or in any way pledged, r ds security for any loan or debt : which oath, subscribed by himself, and certified by the officer before whom it is taken, shall be immediately transmitted to the Comptroller of the Currency, and by him filed and preserved in his office. SEC. 10. And be it further enacted. That the directors of Term of on-e-- ariy association first elected or appointed shall hold their places until their successors shall be elected and qualified. All subsequent elections shall be held annually on such day ir the month of January as may be specified in the articles of association : and the directors so elected shall hold their places for one year, and until their successors are elected and qualified. But any director ceasing to be the owner of the requisite amount of stock, or having in any other manner become dis qualified, shall thereby vacate his place. Any vacancy in the board shall be filled by appointment by the remaining directors, and any director so appointed shall hold his place until the next election. If from any cause an election of directors shall not be made Election, when at the time appointed, the association shall not for that cause be dissolved, but an election may be held on any subsequent clay, thirty days notice thereof in all cases having been given in a newspaper published in the city, town, or county in which the association is located ; and if no newspaper is published in such city, town, or county, such notice shall be published in a newspaper published nearest thereto. If the articles of association do not fix the day on which the elec tion shall be held, or if the election should not be held on tlio day fixed, the day for the election shall be designated by the board of directors in their by-laws, or otherwise: Provided, That if the directors fail to fix the day, as afore said, shareholders representing two-thirds of the shares may. SEC. 11. And be it further enacted, That in all elections of stockholders directors, and in deciding all questions at meetings of share- votes : proxies. 108 BANKING LAWS. NO officer, &c., to holders, each shareholder shall be entitled to one vote on each share of stock held by him. Shareholders may vote by proxies duly authorized in writing ; but no officer, clerk, teller, or bookkeeper of such association shall act as proxy ; and no shareholder whose liability is past due and unpaid shall be allowed to vote. Shares personal property; trans ferable. Rights and lia bilities of share holders. CAPITAL STOCK AND STOCKHOLDERS. SEC. 12. And be it farther enacted, That the capital stock of any association formed under this act shall be divided into shares of one hundred dollars each, and be deemed per sonal property and transferable on the books of the associa tion in such manner as may be prescribed in the by-laws or articles of association ; and every person becoming a share holder by such transfer shall, in proportion to his shares, succeed to all the rights and liabilities of the prior holder of such shares, and no change shall be made in the articles of association by which the rights, remedies, or security of the existing creditors of the association shall be impaired. The shareholders of each association formed under the provisions of this act, and of each existing bank or banking association that may accept the provisions of this act, shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engage ments of such association to the extent of the amount of their stock therein at the par value thereof, in addition to that amount invested in such shares ; 7 except the sharehold ers of any banking association now existing under State laws, having not less than five millions of dollars of capital actu ally paid in, and a surplus of twenty per centum on hand, both to be determined by the Comptroller of the Currency, shall be liable only to the amount invested in their shares : 7. The liability of stockholders is several, not joint. The limit of their liability is the par of the stock held by each one. Where the whole amount is sought to be recovered the proceeding must be at law. Where less is re quired the proceeding may be in equity for contribution, and all stockholders who can be reached by the process of the court may be joined in the suit; but it is no objection that there are others beyond the jurisdiction of the court, who cannot for that reason be made co-defendants. (Kennedy v. Gibson et al, 8 Wallace, 493.) CAPITAL STOCK AND STOCKHOLDERS. lO and such surplus of twenty per centum shall he kept undi- minished, and be in addition to the surplus provided for in this act; and if at any time there shall he a deficiency in said surplus of twenty per centum, the said hanking associ ation shall not pay any dividends to its shareholders until such deficiency shall be made good ; and in case of such de ficiency, the Comptroller of the Currency may compel said banking association to close its business and wind up its affairs under the provisions of this act. And the Comptroller shall have authority to withhold comptroller may from an association his certificate authorizing the commence- ment of business, whenever he shall have reason to suppose cases. that the shareholders thereof have formed the same for any other than the legitimate objects contemplated by this act. SEC. 13. And be it further enacted, That it shall be lawful increase of capi- for any association formed under this act, by its articles of tal association, to provide for an increase of its capital from time to time as may be deemed expedient, subject to the limitations of this act: Provided, That the maximum of such increase in the articles of association shall be deter mined by the Comptroller of the Currency; and no increase of capital shall be valid until the whole amount of such increase shall be paid in, and notice thereof shall have been transmitted to the Comptroller of the Currency, and his certificate obtained specifying the amount of such increase of capital stock, with his approval thereof, and -that it has been duly paid in as part of the capital of such association. And every association shall have power, by the vote of Reduction 01 shareholders owning two-thirds of its capital stock, to re- ca P itai - duce the capital of such association to any sum not below the amount required by this act, in the formation of associa tions: Provided, That by no such reduction shall its capital Proviso, be brought below the amount required by this act for its outstanding circulation, nor shall any such reduction be made until the amount of the proposed reduction has been reported to the Comptroller of the Currency and his ap proval thereof obtained. SEC. 14. And be it further enacted, That at least fifty per Fift ^ P er cent - of ,, ., / T P . ,. i n , -, capital to be paid centum of the capital stock of every association shall be paid in- 110 BANKING LAWS. before com mencing busi ness. Rt ick of delin quent stockhold er.*, how sold. Bonds to be de posited in before it shall be authorized to commence business ; and the remainder of the capital stock of such association shall be paid in installments of at least ten per centum each on the whole amount of the capital as frequently as one install ment at the end of each succeeding month from the time it shall be authorized by the Comptroller to commence busi ness; and the payment of each installment shall be certified to the Comptroller, under oath, by the president or cashier of the association. SEC. 15. And be it further enacted, That if any share holder, or his assignee, shall fail to pay any installment on the stock when the same is required by the foregoing section to be paid, the directors of such association may sell the stock of such delinquent shareholder at public auction, having given three weeks previous notice thereof in a newspaper published and of general circulation in the city or county where the association is located, and if no newspaper is pub lished in said city or county, then in a newspaper published nearest thereto, to any person who will pay the highest price therefor, and not less than the amount then due thereon, with the expenses of advertisement and sale ; and the excess, if any, shall be paid to the delinquent shareholder. If no bidder can be found who will pay for such stock the amount due thereon to the association, and the cost of ad vertisement and sale, the amount previously paid shall be forfeited to the association, and such stock shall be sold ; as the directors may order, within six months from the time of such forfeiture, and if not sold it shall be canceled and deducted from the capital stock of the association; and if such cancellation and reduction shall reduce the capital o r the association below the minimum of capital required by this act, the capital stock shall, within thirty days from the date of such cancellation, be increased to the requirements of the act ; in default of which a receiver may be appointed to close up the business of the association according to the provisions of the fiftieth section of this act. DEPOSIT OF UNITED STATES BONDS. SEC. 16. And be it further enacted, That every association, after having complied with the provisions of this act, pro- CERTIFICATE OF ORGANIZATION. Ill liminary to the commencement of banking business under before com- its provisions, and before it shall be authorized to com- e e S s Cmsbu mence business, shall transfer and deliver to the Treasurer of the United States any United States registered bonds bearing interest to an amount not less than thirty thousand dollars nor less than one-third of the capital stock paid in, which bonds shall be deposited with the Treasurer of the United States, and by him safely kept in his office until the same shall be otherwise disposed of in pursuance of the provisions of this act; And the Secretary of the Treasury is hereby authorized to receive and cancel any United States coupon bonds, and to issue in lieu thereof registered bonds of like amount, bearing a like rate of interest, and having the same time to run ; and the deposit of bonds shall be, by every associa tion, increased as its capital may be paid up or increased, so that every association shall at all times have on deposit with the Treasurer registered United States bonds to the amount of at least one-third of its capital stock actually paid in : Provided, That nothing in this section shall prevent an association that may desire to reduce its capital or to close up its business and dissolve its organization from taking up its bonds upon returning to the Comptroller its circulating notes in the proportion hereinafter named in this act, nor from taking up any excess of bonds beyond one-third of its capital stock and upon which no circulating notes have been delivered. CERTIFICATE OF ORGANIZATION. SEC. 17. And be it further enacted, That whenever a cer- Examination by tificate shall have been transmitted to the Comptroller of SS^J^ the Currency, as provided in this act, and the association ing certificate. transmitting the same shall notify the Comptroller that at least fifty per centum of its capital stock has been paid in as aforesaid, and that such association has complied with all the provisions of this act as required to be complied with before such association shall be authorized to commence the business of banking, the Comptroller shall examine into the 112 BANKING LAWS. When certificate publication thereof. Transfer of bonds deposited how made. condition of such association, ascertain especially the amount of money paid in on account of its capital, the name and place of residence of each of the directors of such associa tion, and the amount of the capital stock of which each is the bona fide owner, and generally whether such association has complied with all the requirements of this act to entitle it to engage in the business of banking; and shall cause to be made and attested, by the oaths of a majority of the di rectors and by the president or cashier of such association, a statement of all the facts necessary to enable the Comp troller to determine whether such association is lawfully en titled to commence the business of banking under this act. SEC. 18. And be it further enacted. That if, upon a careful examination of the facts so reported, and of any other facts which may come to the knowledge of the Comptroller, whether by means of a special commission appointed by him for the purpose of inquiring into the condition of such association or otherwise, it shall appear that such associa tion is lawfully entitled to commence the business of bank ing, the Comptroller shall give to such association a certifi cate, under his hand and official seal, that such association has complied with all the provisions of thi* act required to be complied with before being entitled to o.nnmence the business of banking under it, and that sue. 1 ! association is authorized to commence said business accordingly ; and it shall be the duty of the association to cause said certificate to be published in some newspaper published in the city or county where the association is located for at least sixty days next after the issuing thereof: Provided, That if no newspaper is published in such city or county, the certifi cate shall be published in a newspaper published nearest thereto. TRANSFER OF BONDS TO TREASURER. SEC. 19. And be it further enacted, That all transfers of United States bonds which shall be made by any association under the provisions of this act shall be made to the Treas urer of the United States in trust for the association, with a memorandum written or printed on each bond, and signed by the cashier or some other officer of the association mak- CIRCULATING NOTES. Ing the deposit, a receipt therefor to be given to said asso ciation, or by the Comptroller of the Currency, or by a clerk appointed by him for that purpose, stating that it is held in trust for the association on whose behalf such transfer is made, and as security for the redemption and payment of any circulating notes that have been or may be delivered to such association. No assignment or transfer of any such bonds by the Treas- comptroller to urer shall be deemed valid or of binding force and effect transfers- 80 unless countersigned by the Comptroller of the Currency. It shall be the duty of the Comptroller of the Currency to keep in his office a book in which shall be entered the name keep transfer of every association from whose accounts such transfer of bonds is made by the Treasurer, and the name of the party to whom such transfer is made ; and the par value of the bonds so transferred shall be entered therein ; and it shall be the duty of the Comptroller, immediately upon counter signing and entering the same, to advise by mail the asso- and notify ciation from whose account such transfer was made of the p ^ rtl kind and numerical designation of the bonds and the amount thereof so transferred. SEC. 20. And be it further enacted, That it shall be the to have access duty of the Comptroller of the Currency to countersign and bookgTnd^freas enter in the book, in the manner aforesaid, every transfer urer to ins books. or assignment of any bonds held by the Treasurer presented for his signature; and the Comptroller shall have at all times during office hours access to the books of the treas urer, for the purpose of ascertaining the correctness of the transfer or assignment presented to him to countersign ; and the Treasurer shall have the like access to the book above mentioned, kept by the Comptroller, during office hours, to ascertain the correctness of the entries in the same ; and the Comptroller shall also at all times have access to the bonds on deposit with the Treasurer, to ascertain their amount and condition. CIRCULATING NOTES. SEC. 21. And be it further enacted, That upon the transfer circulating notea and delivery of bonds to the Treasurer, as provided in the J be dehvere< ] to 17 A banks, amount, foregoing section, the association making the same shall be proportion, &c. 8 H4 BANKING LAWS. entitled to receive from tlie Comptroller of the Currency cir culating notes of different denominations in blank, regis tered and countersigned as hereinafter provided, equal in amount to ninety per centum of the current market value of the United States "bonds so transferred and delivered, but not exceeding ninety per centum of the amount of said bonds at the par value thereof, if bearing interest at a rate not less than five per centum per annum ; and the amount of such circulating notes to be furnished to each association shall be in proportion to its paid-up capital, as follows, and no more; To each association whose capital shall not exceed five hundred thousand dollars, ninety per centum of such capital ; To each association whose capital exceeds five hundred thousand dollars, but does not exceed one million dollars, eighty per centum of such capital ; To each association whose capital exceeds one million dol lars, but does not exceed three millions of dollars, seventy- . five per centum of such capital ; To each association whose capital exceeds three millions of dollars, sixty per centum of such capital; Apportionment And that one hundred and fifty millions of dollars of the among t he states en ^ re amount f circulating notes authorized to be issued shall be apportioned to associations in the States,, in the District of Columbia, and in the Territories, according to representative population, and the remainder shall be ap portioned by the Secretary of the Treasury among associa tions formed in the several States, in the District of Colum bia, and in the Territories, 8 having due regard to the existing banking capital, resource, and business of such State, Dis trict, and Territory. [As amended by act of March 3, 1865, chapter 82.] Limitation Df SEC. 22. And be it further enacted, That the entire amount amount. o f no t es f or circulation to be issued under this act shall not exceed three hundred millions of dollars. 9 8. The act of July 12, 1870, chapter 252. section 6, provides for a re-distribu tion of $25,000,000 of circulation, to be taken from the banks of States having an excess, and given to those of States having less than their proportion. 9. The amount of currency notes which may be issued is increased $54,- 000,000 by the act of July 12, 1870, section 1, to be apportioned as therein CIRCULATING NOTES. 115 In order to furnish suitable notes for circulation, the Plates and die?, Comptroller of the Currency is hereby authorized and re- r quired, under the direction of the Secretary of the Treasury, to cause plates and dies to be engraved, in the best manner to guard against counterfeiting and fraudulent alterations, and to have printed therefrom and numbered such quan tity of circulating notes, in blank, of the denominations of Denomination 01 one dollar, two dollars, three dollars, five dollars, ten dol lars, twenty dollars, fifty dollars, one hundred dollars, five hundred dollars, and one thousand dollars, as may be re quired to supply, under this act, the associations entitled to receive the same : Which notes shall express upon their face that they are Notes, what to ex- secured by United States bonds, deposited with the Treasu- press< rer of the United States by the written or engraved signa tures of the Treasurer and Register, and by the imprint of the seal of the Treasury ; and shall also express upon their face the promise of the association receiving the same- to pay on demand, attested by the signatures of the president or vice president and cashier. And the said notes shall bear such devices and such other statements, and shall be in such form, as the Secretary of the Treasury shall by regulation direct: Provided, That not more than one-sixth part of the notes Limit to number furnished to an association shall be of a less denomination ofnotesunde ^ 5 - than five dollars, and that after specie payments shall be resumed no association shall be furnished with notes of a less denomination than five dollars. SEC. 23. And be it further enacted, That after any such when banks may association shall have caused its promise to pay such notes l on demand to be signed by the president or vice president and cashier thereof, in such manner as to make them oblig atory promissory notes, payable on demand, at its place of business, such association is hereby authorized to issue and circulate the same as money ; provided; and no banking association organized after that date can have a . circulation of currency notes in excess of $500,000. A national gold bank may have a circulation of gold notes to an amount not exceeding $1,000,000, and there is no limit to the aggregate amount which may be iss ied. (See Act of July 1 2, 1870, chapter 252, sec. 3.) 116 BANKING LAWS. For what the notes tin receiv able. Banks to issue no other notes. Replacing of worn-out, mutila ted, or lost notes. Mutilated notes, tc., to be burned. And the same shall be received at par in all parts of thp United States in payment of taxes, excises, public lands, and all other dues to the United States, except for duties on im ports ; and also for all salaries and other debts and demands owing by the United States to individuals, corporations, and associations within the United States, except interest on the public debt, and in redemption of the national currency. And no such association shall issue post notes or any other notes to circulate as money than such as are authorized by the foregoing provisions of this act. SEC. 24. And be it further enacted, That it shall be the duty of the Comptroller of the Currency to receive worn-out or mutilated circulating notes issued by any such banking association, and also, on due proof of the destruction of any such circulating notes, to deliver iri place thereof to such association other blank circulating notes to an equal amount. And such worn-out or mutilated notes, after a memoran dum shall have been entered in the proper books, in accord ance with such regulations as may be established by the Comptroller, as well as all circulating notes which shall have been paid or surrendered to be canceled, shall be burned to ashes in presence of four persons, one to be ap pointed by the Secretary of the Treasury, one by the Comp troller of the Currency, one by the Treasurer of the United States, and one by the association, under such regulations as the Secretary of the Treasury may prescribe. And a cer tificate of such burning, signed by the parties so appointed, shall be made in the books of the Comptroller, and a dupli cate thereof forwarded to the association whose notes are thus canceled. Bonds to be ex amined annually by agents of bunks. PROVISION CONCERNING BONDS HELD BY TREASURER. SEC. 25. At^d be it further enacted, That it shall be the duty of every banking association having bonds deposited in the office of the Treasurer of the United States, once or oftener in each fiscal year, and at such time or times during the ordinary business hours as said officer or officers may select, to examine and compare the bonds so pledged with the books of the Comptroller and the accounts of the asso- BONDS DEPOSITED. 117 elation, and, if found correct, to execute to the said Treas urer a certificate setting forth the different kinds and the amounts thereof, and that the same are in the possession and custody of the Treasurer at the date of such certificate. Such examination may be made by an officer or agent of such association, duly appointed in writing for that pur pose, whose certificate before mentioned shall be of like force and validity as if executed by such president or cash ier; and a duplicate signed by the Treasurer shall be retained by the association. SEC. 26. And be it further enacted. That the bonds trans- Bonds to be hoii ferred to and deposited with the Treasurer of the United exclusively for 1 redemption ot States, as hereinbefore provided, by any banking associa- notes. tion for the security of its circulating notes, shall be held exclusively for that purpose, until such notes shall be re deemed, except as provided in this act; But the Comptroller of the Currency shall give to any -interest on, such banking association powers of attorney to receive and ^ni-s 01 appropriate to its own use the interest on the bonds which it shall have so transferred to the Treasurer; but such < powers shall become inoperative whenever such banking association shall fail to redeem its circulating notes as aforesaid. Whenever the market or cash value of any bonds de- -when market posited with the Treasurer of the United States, as afore- ^0^0^^ said, shall be reduced below the amount of the circulation intion, additional issued for the same, the Comptroller of the Currency is ^sitecT hereby authorized to demand and receive the amount of such depreciation in other United States bonds at cash value, or in money, from the association receiving said bills, to be deposited with the Treasurer of the United States as long as such depreciation continues. And said Comptroller, upon the terms prescribed by the -may be ex- Secretary of the Treasury, may permit an exchange to be made of any of the bonds deposited with the Treasurer by an association for other bonds of the United States author ized by this act to be received as security for circulating notes, if he shall be of opinion that such an exchange can be made without prejudice to the United States, and he may 118 BANKING LAWS. Jnlawful issue of notes to asso ciations penalty incurred. direct the return of any of said bonds to the banking asso ciation which transferred the same, in sums of not less than one thousand dollars, upon the surrender to him and the cancellation of a proportionate amount of such circulating notes: Provided, That the remaining bonds which shall have been transferred by the banking association offering to sur render circulating notes shall be equal to the amount re quired for the circulating notes not surrendered by such banking association, and that the amount of bonds in the hands of the Treasurer shall not be diminished below the amount required to be kept on deposit with him by this act: And provided, That there shall have been no failure by such association to redeem its circulating notes, and no other violation by such association of the provisions of this act, and that the market or cash value of the remaining bonds shall not be below the amount required for the circu lation issued for the same. SEC. 27. And be it further enacted. That it shall be un lawful for any officer acting under the provisions of this act to countersign or deliver to any association, or to any other company or person, any circulating notes contemplated by this act, except as hereinbefore provided, and in accordance with the true intent and meaning of this act. And any officer who shall violate the provisions of this section shall be deemed guilty of a high misdemeanor, and on conviction thereof shall be punished by fine not exceeding double the amount so countersigned and delivered, and imprisonment not less than one year and not exceeding fifteen years, at the discretion of the court in which he shall be tried. Hanks may hold and convey real BANKS MAY HOLD HEAL ESTATE. SEC. 28. ^And be it further enacted, That it shall be lawful for any such association to purchase, hold, and convey real estate as follows: -to what extent. First. Such as shall be necessary for its immediate accom modation in the transaction of its business. Second. Such as shall be mortgaged to it in good faith by way of security for debts previously contracted. LOANS AND DISCOUNTS. 110 Third. Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings. Fourth. Such as it shall purchase at sales under judg ments, decrees, or mortgages held by such association, or shall purchase to secure debts due to said association. And such association shall not purchase or hold real es- General nmita- tate in any other case or for any other purpose than as spe- 1 cified in this section. Nor shall it hold the possession of any real estate under mortgage, or hold the title and possession of any real estate purchased to secure any debts due to it for a longer period than five years. LOANS AND DISCOUNTS. SEC. 29. And be it further enacted, That the total liabili- Loans limited. ties to any association, of any person, or of any company, corporation, or firm for money borrowed,, including in the liabilities of a company or firm the liabilities of the several members thereof, shall at no time exceed one-tenth part of the amount of the capital stock of such association actually paid in : Provided, That the discount of bona fide bills of exchange drawn against actually existing values, and the discount of commercial or business paper actually owned by the person or persons, corporation, or firm negotiating the same, shall not be considered as money borrowed. SEC. 30. And be it further enacted, That every association interest O^K*..,, may take, receive, reserve, arid charge, on any loan or dis- anddiecouut * count made, or upon any note, bill of exchange, or other evidences of debt, interest at the rate allowed by the laws of the State or Territory where the bank is located, and no more, except that where by the laws of any State a different rate is limited for banks of issue organized under State laws, the rates so limited shall be allowed for associations organ ized in any such State under this act. And when no rate is fixed by the laws of the State or Territory, the bank may take, receive, reserve, or charge a rate not exceeding seven per centum, and such interest may be taken in advance, reckoning the days for which the note, bill, or other evidence of debt has to run. And the knowingly taking, receiving, reserving, or charg- 120 BANKING LAWS. penalties in curred. Exehang ? may be charged. Banks to hold certain reserves. In case of defi ciency iiig a rate of interest greater than aforesaid shall be held and adjudged a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon. And in case a greater rate of interest has been paid, the person or persons paying the same, or their legal representatives, may recover back, in any action of debt, twice the amount of the interest thus paid from the association taking or receiving the same: Provided. That such action is commenced within two years from the time the usurious transaction occurred. But the purchase, discount, or sale of a bona fide bill of exchange, payable at another place than the place of such purchase, discount, or sale, at not more than the current rate of exchange for sight drafts in addition to the interest, shall not be considered as taking or receiving a greater rate of interest. LEGAL RESERVES REQUIRED. SEC. 31. And be it further enacted, That every association in the cities hereinafter named shall at all times have on hand, in lawful money of the United States, an amount equal to at least twenty-five per centum of the aggregate amount of its notes in circulation and its deposits; and every other association shall, at all times, have on hand, in lawful money of the United States, an amount equal to at least fifteen per centum of the aggregate amount of its notes in circulation and of its deposits. 1 And whenever the lawful money of any association in any of the cities hereinafter named shall be below the amount of twenty -five per centum of its circulation and deposits,. and whenever the lawful money of any other association shall be below fifteen per centum of its circulation and de- 10. By the act of March 2, 1867, chapter 194, the temporary loan certifi cates, or three per cent, certificates, authorized by that act, may be held as part of the national bank reserves, subject to the limitation that not less than two-fifths of the entire reserve of any bank shall consist of lawful money of the United States. And by act of June 8, 1872, chapter 346, the certificates of deposit there in provided for, to bo issued in exchange for United States notes, may be held as part of the legal reserves of banks, and may be accepted in the set tlement of clearing-house balances. (See pp. 27, 28.) LEGAL RESERVES. 12J posits, such association shall not increase its liabilities by certain , . . T , -i IT tions imposed. making any new loans or discounts otherwise than by dis counting or purchasing bills of exchange payable at sight, nor make any dividend of its profits until the required pro portion between the aggregate amount of its outstanding notes of circulation and deposits and its lawful money of the United States shall be restored: Provided, That three-fifths of said fifteen per centum may consist of balances duo to an association available for the re demption of its circulating notes from associations approved by the Comptroller of the Currency., organized under this act, in the cities of Saint Louis, Louisville, Chicago, Detroit, Milwaukee, New Orleans, Cincinnati, Cleveland, Pittsburg, Baltimore, Philadelphia, Boston, New York, Albany, Leav- tnu orth * &&YL Francisco, and Washington city: Provided, also, That clearing-house certificates, repre senting specie or lawful money specially deposited for the purpose of any clearing-house association, shall be deemed to be lawful money in the possession of any association be longing to such clearing-house holding and owning such certificate, and shall be considered to be a part of the law ful money which such association is required to have under the foregoing provisions of this section : Provided, That the cities of Charleston and Eichmond may be added to the list of cities in the national associations of which other associations may keep three-fifths of their lawful money, whenever, in the opinion of the Comptroller of the Currency, the condition of the southern States will warrant it. And it shall be competent for the Comptroller of the in default of ?uf- Currency to notify any association whose lawful money ^^0^0^11]- reserve as aforesaid shall be below the amount to be kept may be wound up. on hand as aforesaid, to make good such reserve; and if such association shall fail for thirty days thereafter so to make good its reserve of lawful money of the United States, the Comptroller may, with the concurrence of the Secretary of the Treasury, appoint a receiver 11 to wind up the business of such association, as provided in this act. * Leavenwortb is stricken out by act of March 1, 1872. 11. Sef section 50, and notes thereto, pp. 133, 134. 122 BANKING LAWS. REDEMPTION AGENCIES. Redemption SEC. 32. And be it further enacted, That each association York C to S be t 8 e- eW or g an i ze d in any of the cities named in the foregoing sec- lected tion shall select, subject to the approval of the Comptroller of the Currency, an association in the city of New York at which it will redeem its circulating notes at par. 1 - And -where part of each of such associations may keep one-half of its lawful reserves > money reserve in cash deposits in the city of New York. Like agencies in And each association not organized within the cities named in the preceding section shall select, subject to the approval of the Comptroller of the Currency, an association in either of the cities named in the preceding section at which it will redeem its circulating notes at par, and the Comptroller shall give public notice of the names of the as sociations so selected at which redemptions are to be made by the respective associations, and of any change that may be made of the association at which the notes of any asso ciation are redeemed. If any association shall fail either to make the selection or to redeem its notes as aforesaid, the Comptroller of the Currency may, upon receiving satisfactory evidence thereof, appoint a receiver, in the manner provided for in this act, Banks to redeem to wind up its affairs I Provided, That nothing in this sec- atl-, 0unn tes ti n sna ll relieve any association from its liability to redeem its circulating notes at its own counter, at par, in lawful and to receive money, on demand : And provided further. That every as- othe"nltionai ny soc i a tion formed or existing under the provisions of this act bank inpayment shall take and receive at par, 12 for any debt or liability to said association, any arid all notes or bills issued by any association existing under and by virtue of this act. DIVIDENDS. Dividends, when SEC. 33. And be it further enacted. That the directors of and ho) elarod. any association may, semi-annually, each year, declare a 12. The act of July 12, 1870, chapter 252, section 5, exempts gold banks in San Francisco from any obligation to redeem their gold notes at par in the city of New York, and also exempts- all gold banks from the provision requir ing national banks to receive in payment of debts the currency notes of every other bank at par. LIMITATIONS AND RESTRICTIONS. 123 dividend of so much of the net profits of the association as they shall judge expedient; but each association shall, Restriction. before the declaration of a dividend, carry one-tenth part of its net profits of the preceding half year to its surplus fund, until the same shall amount to twenty per centum of its capital stock. 1 3 SEC. 34. [Relating to reports, superseded by act of March 3, 1869, chapter 130.] PURCHASING AND LOANING ON SHARES. SEC. 35. And be it further enacted, That no association Banks not to loan shall make any loan or discount on the security of the shares oid the?*own r of its own capital stock, 14 nor be the purchaser or holder shares, except m of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously con tracted in good faith ; and stock so purchased or acquired shall, within six months from the time of its purchase, be sold or disposed of at public or private sale, in default of which a receiver may be appointed to close up the business of the association, according to the provisions of this act. LIMITATIONS AND RESTRICTIONS. SEC. 36. And be it further enacted. That no association Limitation of m- shall at any time be indebted, or in any way liable, to an debtedness aT d exceptions. amount exceeding the amount of its capital stock at such time actually paid in and remaining undiminished by losses or otherwise, except on the following accounts, that is to say First. On account of its notes of circulation. Second. On account of moneys deposited with, or collected by, such association. Third. On account of bills of exchange or drafts drawn against money actually on deposit to the credit of such asso ciation or due thereto. 13. There are further restrictions in section 38, on making dividends, that none shall be made to a greater amount than the net profits on hand, and none whatever if the losses equal or exceed the profits. 14. The deposit of funds of a bank with bankers is a loan within the meaning of this section, and cannot be secured by a pledge of the shares of the bank. (Bank v.Lanier, 11 Wallace, 369.) 124 BANKING LAWS. Notes lot to be pledged nor used to increase capi tal. Withdrawal of capital forbidden. Dividends lim ited when losses occur by bad debts. What are bad debts. Notes not to be paid out, except those of solvent banks, redeem able at par. Fourth. On account of liabilities to its stockholders for dividends and reserved profits. SEC. 37. And be it further enacted, That no association shall, either directly or indirectly, pledge or hypothecate any of its notes of circulation, for the purpose of procur ing money to he paid in on its capital stock, or to he used in its banking operations, or otherwise ; nor shall any association use its circulating notes, or any part thereof, in any manner or form, to create or increase its capital stock. SEC. 38. And be it further enacted, That no association, or any member thereof, shall, during the time it shall con tinue its banking operations, withdraw, or permit to be withdrawn, either in form of dividends or otherwise, any portion of its capital. And if losses shall at any time have been sustained by any such association equal to or exceeding its undivided profits then on hand, no dividend shall be made; and no dividend shall ever be made by any association, while it shall continue its banking operations, to an amount greater than its net profits then on hand, deducting therefrom its losses and bad debts. And all debts due to any association, on which interest is past due and unpaid for a period of six months, unless the same shall be well secured, and shall be in process of collection, shall be considered bad debts within the mean ing of this act: Provided, That nothing in this section shall prevent the reduction of the capital stock of the asso ciation under the thirteenth section of this act. SEC. 39. And be it further enacted, That no association shall at any time pay out on loans or discounts, or in pur chasing drafts or bills of exchange, or in payment of de posits, or in any other mode pay or put in circulation the notes of any bank or banking association which shall not, at any such time, be receivable, at par, on deposit and in payment of debts by the association so paying out or circu lating such notes; nor shall it knowingly pay out or put in circulation any Botes issued by any bank or banking association which at the time of such paying out or putting PLATES AND DIES TAXES. 125 in circulation is not redeeming its circulating notes in law ful money of the United States. LIST OF STOCKHOLDERS. SEC. 40. And be it further enacted, That the president and Listofstockhoi.-i- cashier of every such association shall cause to he kept at aiTtimesami^nt all times a full and correct list of the names and residences to comptroller 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. PLATES AND DIES TAXES. SEC. 41. And be it further enacted., That the plates and pintes and -uos, special dies to be procured by the Comptroller of the Cur- h rency for the printing of such circulating notes shall remain under his control and direction, and the expenses necessa rily incurred in executing the provisions of this act respect ing 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 hflnks - January and July, a duty 1 5 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 rela tion to the payment of taxes and duties by banks may be found at the end of the banking laws printed in this volume. 126 BANKING LAWS. 3e mi-annual re turns. Penalty for de fault. Taxes on shares may be imposed by State author ity. stock beyond the amount invested in United States bonds ; and in case of default in the payment thereof by any asso ciation, 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 circu lation, 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 clays 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 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 Comp troller 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 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 corpo ration in the assessment of taxes imposed by or under State authority 16 at the place where such bank is located, and 16. By act of Feb y 10, 1868, chapter 7, the word "place," as used in this section, is defined to mean the State within which the hank is located, and further provisions are made authorizing States to tax national hanks. Bank shares may constitutionally be taxed under State authority, with LIQUIDATION AND CLOSING. 127 not elsewhere, but not at a greater rate than is assessed upon other moneyed capital in the hands of individual citi zens of such State : Provided further , That the tax so im posed 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 or ganized under authority of the State where such association is located: Provided, also, That nothing in this act shall And on real es- exempt 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. LIQUIDATION AND CLOSING. SEC. 42. And be it further enacted, That any association Banks may vol untarily go i liquidation. may go into liquidation and be closed by the vote of its shareholders owning two-thirds of its stock. And when ever 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 hank 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 share*, 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 con tract 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 bind ing 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; 09 Mats., 141; 14 Allen, 359; 11 Minn., 500; 44 Barb our, 148; 32 Conn., 173; 16 Ohio State JR., 614; 54 Pcnn. State R., 139; 23 Wis., 655; 27 Iowa, 350; 32 New Jersey Law R., 273. (See also 2 Black, S. C. U. 3., 620.) 128 BANKING LAWS. 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 pub lished 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 after one And at any time after the expiration of one year from the year, on payment time of the publication of su ch notice as aforesaid, the said 01 outstanding notes, may with- association may pay over to the Treasurer of the United draw its bonds. States the amount o f i ts 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 ; 1 7 which bonds shall be as signed 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 le it further enacted, That the Treasurer, count to be kept on rece ivinp from an association lawful money for the pay- by Treasurer; J L J notes to be re- nient and redemption of its outstanding notes, as provided burned* * ^ or * n ^ ie P recec ^i n g section of this act, shall execute dupli cate 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 re ceived, 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. 4 (Opin ions of Attorneys General, vol. 12, p. 549.) CONVERSION OF STATE BANKS. 129 all notes so redeemed by the Treasurer shall, every three months, he certified to and burned in the manner prescribed in the twenty-fourth section of this act. CONVERSION OF STATE BANKS. SEC. 44. And be it further enacted, That any bank incor- state banks, how they may becorn national bnnkn. porated by special law, or any banking institution organ- i ized under a general law of any State, 1 8 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 major ity of the directors of the bank or banking institution ; and said certificate shall declare that the owners of two- thirds 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 un der 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 com plete 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 ren 18. A national bank organized from a State bank, and receiving its assets, is liable for its debts. (Thorp v. Wegefarth, 56 Perm., 82.) The right of action to recover damages for the fraudulent misapplica tion 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 Na tional Bank of the City of New York v. Clarke, 48 .Bar hour, 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 organi zations, 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.) 9 130 BANKING LAWS. Directors. May continue to hold shares in other banks. When may com mence business. Minimum capi tal. the directors aforesaid may be the directors of the associa tion until others are elected or appointed in accordance with the provisions of this act ; And any State bank which is a stockholder in any other bank, by authority of State laws, may continue to hold its stock, although either bank, or both, may be organized under and have accepted the provisions of this act. When the Comptroller shall give to such association a certificate, under his hand and official seal, that the pro visions of this act have been complied with, and that it is authorized to commence the business of banking under it, the association shall have the same powers and privileges, and shall be subject to the same duties, responsibilities, and rules, in all respects, as are prescribed in this act for other associations organized under it, and shall be held and re garded as an association under this act : Provided, hotuever, That no such association shall have a less capital than the amount prescribed for banking associations under this act . DESIGNATED DEPOSITARIES. v. hen may be de- SBC. 45. And be it further enacted , That all associations under this act, when designated for that purpose by the Secretary of the Treasury, shall be depositaries of public money, 1 9 except receipts from customs, under such regula tions as may be prescribed by the Secretary ; and they may also be employed as financial agents of the Government ; and they shall perform all such reasonable duties, as deposi taries of public moneys and financial agents of the Govern ment, as may be required of them. And the Secretary of the Treasury shall require of the associations thus designated satisfactory security, by the deposit of United States bonds and otherwise, for the safe keeping and prompt payment of the public money deposited 19. Banks designated as depositaries, under the provisions of this act, are public depositaries within the meaning of the act of August 6, 1846, (9 Stat. at Large, 59,) as amended by the act of March 3, 1857, (11 Stat. at Large, 249,) requiring every disbursing officer or agent of the United States, having any money of the Government, to deposit the same with the United States Treas nrcr, or with some one of the Assistant Treasurers or public depos 1 * <. i (Opinions. of Attorneys General, vol. II, page 29.) Security to be given. FAILURE TO REDEEM NOTES. 131 with them, and for the faithful performance of their duties as financial agents of the Government: Provided, That TO receive at par i i i i-i i -iii in- i i nil national cur- eveiy association which shall be selected and designated as rency bms. receiver or depositary of the public money shall take and receive at par all of the national currency bills, by what ever association issued, which have been paid into the Government for internal revenue, or for loans or stocks. PROCEEDINGS ON FAILURE TO REDEEM NOTES. SEC. 46. And be it further enacted, That if any such asso- Notes, when not ciation shall at any time fail to redeem, in the lawful money mamnSyljanks of the United States, any of its circulating notes, when pay- issuing them, to ment thereof shall be lawfully demanded, during the usual hours of business, at the office of such association, or at its place of redemption aforesaid, the holder may cause the same to be protested, in one package, by a notary public, unless the president or cashier of the association whose notes are presented for payment, or the president or cashier of the association at the place at which they are redeemable, shall offer to waive demand and notice of the protest, and shall, in pursuance of such offer, make, sign, and deliver to the party making such demand an admission in writing, stating the time of the demand, the amount demanded, and the fact of the non-payment thereof; and such notary public, on making such protest, or upon receiving such admission, shall forthwith forward such admission or notice of protest to the Comptroller of the Currency, retaining a copy thereof. And after such default, on examination of the facts by comptroller to the Comptroller, and notice by him to the association, it examine into the 7 J facts and notify shall not be lawful for the association suffering the same to banks, &c. pay out any of its notes, discount any notes or bills, or otherwise prosecute the business of banking, except to re ceive and safely keep money belonging to it, and to deliver special deposits : Provided, That if satisfactory proof be produced to such Restriction on notary public that the payment of any such notes is re- |J^J** n< strained by order of any court of competent jurisdiction, such notary public shall not protest the same; and when the holder of such notes shall cause more than one note or 132 BANKING LAWS. package to be protested on the same day, lie shaL not receive pay for more than one protest. comptroller s SEC. 47. And be it further enacted, That on receiving no- no tice n of e protesf t ^ ce ^ iat an > T suc ^ association has failed to redeem any of of not*?. its circulating notes, as specified in the next preceding sec tion, the Comptroller of the Currency, with the concurrence of the Secretary of the Treasury, may appoint a special agent (of whose appointment immediate notice shall he given to such association,) who shall immediately proceed to ascertain whether such association has refused to pay its circulating notes in the lawful money of the United States, when demanded as aforesaid, and report to the Comptroller the facts so ascertained; and if, from such protest or the report so made, the Comptroller shall he satisfied that such association has refused to pay its circulating notes as afore- Forfeiturecf said and is in default, he shall, within thirty days after he shall have received notice of such failure, declare the United States bonds and securities pledged by such association for feited to the United States, and the same shall thereupon be forfeited accordingly. And thereupon the Comptroller shall immediately give paiied\nandpirid not i ce ^ n suc ^ manner as the Secretary of the Treasury at .u. s. Treasury, shall, by general rules or otherwise, direct, to the holders of the circulating notes of such association to present them for payment at the Treasury of the United States, and the same shall be paid as presented in lawful money of the United States; whereupon said Comptroller may, in his discretion, cancel an amount of bonds pledged by such association equal at current market rates, not exceeding par, to the notes paid. Disposal of notes And it shall be lawful for the Secretary of the Treasury, from time to time, to make such regulations respecting the disposition to be made of such circulating notes after pre sentation thereof for payment as aforesaid, and respecting the perpetuation of the evidence of the payment thereof, as may seem to him proper ; but all such notes, on being paid, shall be canceled. And for an y deficiency in the proceeds of the bonds pledged by such association, when disposed of as herein- FAILURE TO REDEEM NOTES. 133 after specified, to reimburse to the United States the amount united states so expended in paying the circulating notes of such associa- tion, the United States shall have a first and paramount amount expend- . .. ed in redemption hen upon all the assets of such association; and such defi- O f notes. ciency shall be made good out of such assets in preference (See note u, page to any arid all other claims whatsoever, except the neces- 135 ^ sary costs and expenses of administering the same. SEC. 48. And be it further enacted, That whenever the Bonds to be sold Comptroller shall become satisfied, as in the last preceding %S^*? tn section specified, that any association has refused to pay its notes. circulating notes as therein mentioned, he may, instead of canceling the United States bonds pledged by such associa tion, as provided in the next preceding section, cause so much of them as may be necessary to redeem the outstand ing circulating notes of such association to be sold at public auction in the city of New York, after giving thirty days notice of such sale to such association. SEC. 49. And be it further enacted, That the Comptroller May be sold at of the Currency may, if he shall be of opinion that the in- 0^0^*" terests of the United States will be best promoted thereby, thinks best. sell at private sale any of the bonds pledged by such asso ciation, and receive therefor either money or the circulating notes of such failing association: Provided, That no such bonds shall be sold by private sale for less than par, nor less than the market value thereof at the time of sale: And provided further, That no sales of any such bonds, saiesnotcom- either public or private, shall be complete until the transfer ^f^* 1 tmns " thereof shall have been made with the formalities prescribed in this act. SEC. 50. And be it further enacted, That on becoming Receiver, when satisfied, as specified in this act, that any association has refused to pay its circulating notes as therein mentioned, ties. and is in default, the Comptroller of the Currency may forthwith appoint a receiver, and require of him such bond and security as he shall deem proper, who, under the direc tion of the Comptroller, shall take possession of the books, records, and assets 2 .of every description of such associa- 20. As to the power of a receiver over the residue of bonds deposited to secure circulation, after the payment of all notes, see the opinions of 134 BANKING LAWS. lion, collect all debts, dues, and claims 2l belonging to such association, and, upon the order of a court of record of com petent jurisdiction,* 2 may sell or compound all bad or doubt ful debts, and, on a like order, sell all the real and personal property of such association, on such terms as the court shall direct ; and may, if necessary to pay the debts of such association, enforce the individual liability of the stock holders provided for by the twelfth section of this act ; 2 3 and such receiver shall pay over all money so made to the Treasurer of the United States, subject to the order of the a divided court in Van Antwerp v. Hulburd et al., (8 Blatchford C. 0. R., 282.) The right to appeal from a judgment in a suit against a State bank con verted into a national bank which fails, passes to the receiver. (Claflin v. The Farmers and Citizens Bank of Long Island, 54 Harbour, 228.) 21. The word "debts" in this section includes all legal liabilities. The assets in the hands of the receiver are to be divided and appropriated to the payment of all legal liabilities, whether such liabilities are debts, technically so called, or result from the non-feasance or mal-feasance of the association in respect to its binding obligations and duties. (Turner v. First National Bank of Keokuk, 26 Iowa,, 562.) A receiver of a national bank is an officer of the United States, and may bring suits in the district courts of the United States, under the provis ions of the act of March 3, 1815, (sec. 4,) to collect claims due to the bank. His appointment by the Comptroller of the Currency, with the concurrence of the Secretary of the Treasury, is equivalent to an appointment by the Secretary, who is the head of a Department, and comes within the provisions of the Constitution, art. II, sec. 2, sub. 2. (Plait, Receiver, v. Beach, 2 Bene dict s District Court R., 303.) After a bank had stopped payment, and before a receiver was appointed, a debtor to the bank purchased and took an assignment of the claim of a depositor, for the purpose of having it set off against his debt. A receiver was afterwards appointed, and the set-off was disallowed and the assignment held to be void, as an attempt to give a preference prohibited by this act. (Venango National Bank v. Taylor, 56 Penn., 14.) 22. A district court of the United States is a court of record of competes jurisdiction, within the meaning of this section, to make an order authorizing a receiver to compromise doubtful debts. (Petition of Platt, Receiver, 1 Bene dict s District Court R., 534.) 23. Action on the part of the Comptroller of the Currency is indispensable, whenever the personal liability of the stockholders is sought to bo enforced, and must precede the institution of suit by the receiver, who is the statu tory assignee, and the proper party to institute all suits. Creditors of the bank are not proper parties to such suits. (Kennedy v. Gibson et al., 8 Wallace, 498.) FAILURE TO REDEEM NOTES. 135 Comptroller of the Currency, and also make report to the Comptroller of the Currency of all his acts and proceedings. The Comptroller shall thereupon cause notice to be given, by advertisement in such newspapers as he may direct, for comptroller to three consecutive months, calling on all persons who may claims- 6 fC have claims against such association to present the same, and to make legal proof thereof. And from time to time the Comptroller, after full provision shall have been first made for refunding to the United States any such deficiency in redeeming the notes of such association as is mentioned in this act, shall make a ratable 24 dividend of the money and make dm so paid over to him by such receiver on all such claims as dends - may have been proved to his satisfaction or adjudicated in a court of competent jurisdiction ; 2 5 and from time to time, as the proceeds of the assets of such association shall be paid over to him, he shall make further dividends, as afore said, on all claims previously proved or adjudicated; and Balance, if any, the remainder of such proceeds, if any, shall be paid over shareholders. to the shareholders of such association, or their legal repre sentatives, in proportion to the stock by them respectively held. Provided, however, That if such association against which Banks denying proceedings have been so instituted, on account of any refus^to^cT alleged refusal to redeem its circulating notes as aforesaid, deem notes maj shall deny having failed to do so, such association may, at 1011 S any time within ten days after such association shall have been notified of the appointment of an agent, as provided in this act, apply to the nearest circuit, or district, or terri torial court of the United States, to enjoin further proceed ings in the premises; and such court, after citing the 24. The United States have no right to priority of payment of debts due to the Government as against private creditors of insolvent banks, except to be reimbursed the amount expended in redeeming the circulating notes of such banks, according to the provisions of section 47 of this act. (Seepage 132.) The act of March 3, 1797, (sec. 5,) giving the United States priority over general creditors of insolvent debtors, does not apply to national banks. (Offi cial Opinion of Attorney General Aker man, 1870.) 25. The Supreme Court of Iowa held that the receiver is a proper party in proceedings for the adjudication of claims against a national bank. (Tur ner v. First National Bank of Keokuk, 26 Iowa, 562.) 136 BANKING LAWS. Comptroller of the Currency to show cause why further proceedings should not be enjoined, and after the decision of the court or finding of a jury that such association has not refused to redeem its circulating notes, when legally presented, in the lawful money of the United States, shall make an order enjoining the Comptroller, and any receiver acting under his direction, from all further proceedings on account of such alleged refusal. of pro- SEC. 51. And be it further enacted, That all fees for pro- testing the notes issued by any such banking association p^d. shall be paid by the person procuring the protest to be made, and such banking association shall be liable there for; but no part of the bonds pledged by such banking as- ssciation, as aforesaid, shall be applied to the payment of such fees. And all expenses of any preliminary or other examinations into the condition of any association shall be paid by such association ; and all expenses of any receiver ship shall be paid out of the assets of such association before distribution of the proceeds thereof. Transfer of prop- SEC. 52. And be it further enacted, That all transfer of bfnksflnd^ther the notes ; bonds > bills of exchange, and other evidences of acts giving pref- debt owing to any association, or of deposits to its credit; crence, void. 11 c A.- i p all assignments or mortgages, sureties on real estate, or of judgments or decrees in its favor; all deposits of money, bullion, or other valuable thing for its use, or for the use of any of its shareholders or creditors ; and all payments of money to either, made after the commission of an act of insolvency, or in contemplation thereof, with a view to pre vent the application of its assets in the manner prescribed by this act, or with a view to the preference of one creditor to another, except in payment of its circulating notes, shall be utterly null and void. VIOLATION OF LAW BY DIRECTORS violation of law SEC. 53. And be it further enacted, That if the directors by directors to O f any association shall knowingly violate, or knowingly forfeit right*, &<. J J & J f bank, and di- permit any of the officers, agents, or servants of the asso- ciation to violate, any of the provisions of this act, all the rights, privileges, and franchises of the association derived MISDEMEANORS OF OFFICERS. 13Y from this act shall be thereby forfeited. Such violation shall, however, be determined and adjudged by a proper circuit, district, or territorial court of the United States, in a suit brought for that purpose by the Comptroller of the Currency, in his own name, before the association shall be declared dis solved. And in cases of such violation, every director who participated in or assented to the same shall be held liable in his personal and individual capacity for all damages which the association, its shareholders, or any other person, shall have sustained in consequence of such violation. BANK EXAMINERS. SEC. 54. And be it further enacted, That the Comptroller Bank examiners, of the Currency, with the approbation of the Secretary of ^ ir duty an(i the Treasury, as often as shall be deemed necessary or proper, shall appoint a suitable person or persons to make an examination of the aifairs of every banking association, which person shall not be a director or other officer in any association whose affairs he shall be appointed to examine, and who shall have power to make a thorough examination into all the affairs of the association, and, in doing so, to examine any of the officers and agents thereof on oath ; and shall make a full and detailed report of the condition of the association to the Comptroller. And the association shall not be subject to any other visitorial powers than such as are authorized by this act, except such as are vested in the several courts of law and chancery. And every person appointed to make such examination shall receive for his services at the rate of five dollars for each day by him employed in such examination, and two dollars for every twenty-five miles he shall necessarily travel in the perform ance of his duty, which shall be paid by the association by him examined. MISDEMEANORS OF OFFICERS. SEC. 55. And be it further enacted. That every president, Embezzlement, director, cashier, teller, clerk, or agent of any association, 26 - funds, and othe 26. The act of April 6, 1869, chapter 11, provides for the punishment of misdemeanors, persons aiding or abetting officers or agents in doing any of the acts enumer- how punished. 138 BANKING LAWS. who shall embezzle, abstract, or willfully misapply any of the moneys, funds, or credits of the association, or shall, without authority from the directors, issue or put in circu lation any of the notes of the association, or shall, without such authority, issue or put forth any certificate of deposit, draw any order or bill of exchange, make any acceptance, assign any note, bond, draft, bill of exchange, mortgage, judgment, or decree, or shall make any false entry in any book, report, or statement of the association, with intent, in either case, to injure or defraud the association or any other company, body politic, or corporate, or any individual person, or to deceive any officer of the association, or any agent appointed to examine the affairs of any such associa tion, shall be deemed guilty of a misdemeanor^ and upon conviction thereof shall be punished by imprisonment not less than five nor more than ten years. SUITS AGAINST BANKS. certain suits to SEC. 56. And be it further enacted, That all suits and pro be conducted by U. S. attorney, &c. be conducted by cee( :[i n g s ar i s i n g ou t O f the provisions of this act, in which the United States or its officers or agents shall be parties, shall be conducted by the district attorneys of the several districts, 27 under the direction and supervision of the Solic itor of the Treasury. jurisdiction of SEC. 57. And be it further enacted. That suits, actions, an( ^ P rocee( liiigs against 28 any association under this act, may be had in any circuit, district, or territorial court of the United States held within the district in which such association may be established, 29 or in any State, county, ated in this section. And the act of July 8, 1870, chapter 226, declares to what officers and what banks the section and the amendment thereto shall apply. 27. The requirement of this section that all suits, &c., under this act shall be conducted by the district attorneys of the several districts is merely di rectory, and suits may be conducted by private counsel. (Kennedy v Gib son et al., 8 Wallace, 504.) 28. Under this section suits may be brought by as well as against national banks in the courts therein mentioned. The omission of the word "by" ia decided to be accidental. (Kennedy v. Gibson et al., 8 Wallace, 506,) 29. The Supreme Judicial Court of Massachusetts has decided that a na- FORGERY. COUNTERFEITING, &o. 139 or municipal court in the county or city in which said asso ciation is located, having jurisdiction in similar cases: Provided, however, 30 That all proceedings to enjoin the Comptroller under this act shall he had in a circuit, district, or territorial court of the United States, held in the district in which the association is located. MUTILATION OF NOTES. SEC. 58. And be it further enacted. That every person who Mutilating notes shall mutilate, cut, deface, disfigure, or perforate with holes, dence^of debts or shall unite or cement together, or do any other thing to punishable, any hank bill, draft, note, or other evidence of debt, issued by any such association, or shall cause or procure the same to be done, with intent to render such bank bill, draft, note, or other evidence of debt unfit to be reissued by said asso ciation, shall, upon conviction, forfeit fifty dollars to the association who shall be injured thereby, to be recovered by action in any court having jurisdiction. FORGERY, CONTERFEITING, PASSING COUNTERFEIT NOTES, MAKING FALSE PLATES, AND OTHER OFFENSES. SEC. 59. And be it further enacted, That if any person Forgery, counter* shall falsely make, forge, or counterfeit, or cause or procure feitin s notes l l f i f - i -iv i -i passing forged to be made, forged, or counterfeited, or willingly aid or notes, &c. assist in falsely making, forging, or counterfeiting, any note in imitation of, or purporting to be in imitation of, the circulating notes issued under the provisions of this act, or shall pass, utter, or publish, or attempt to pass, utter, or publish any false, forged, or counterfeited note, purport ing to be issued by any association doing a banking business under the provisions of this act, knowing the same to be tional bank can be sued in a State court only in the county or city in which it is established. The Supreme Court of New York has decided otherwise, and holds that a national bank may be sued even in a State other than that in which it is located. (Crocker v. Marine National Bank of New York, 101 Mass., 24.0; Cooke v. State National Bank of Boston, 50 Barbour, 339.) 30. This proviso does not give to United States circuit courts jurisdiction of a suit in equity to interfere with the United States Treasurer or Comp troller of the Currency in their duties respecting bonds deposited for the security of notes, and those courts have no such jurisdiction. ( Van Antwerp v. Hulburd, 7 BlatcJiford 0. 0. 21, 426; Same, 8 Blatcliford 0. C. jR., 282.) 140 BANKING LAWS. falsely made, forged, or counterfeited, or shall falsely alter, or caviso cr procure to be falsely altered, or willingly aid or assist in falsely altering, any such circulating notes,, issued as aforesaid, or shall pass, utter, or publish, or attempt to pass, utter, or publish, as true, any falsely altered or spurious cir culating note issued, or purporting to have been issued, as aforesaid, knowing the same to be falsely altered or spurious, every such person shall be deemed and adjudged guilty of felony, and being thereof convicted by due course of law shall be sentenced to be imprisoned arid kept at hard labor for a period of not less than five years nor more than fifteen years, and fined in a sum not exceeding one thousand dollars. Making, p -ocur- SEC. 60. And l>e it further enacted, That if any person ing, or having s h a ll make or engrave, or cause or procure to be made or false plates, dies, i i i? i i - &c. engraved, or shall have in his custody or possession, any plate, die, or block after the similitude of any plate, die, or block from which any circulating notes issued as aforesaid shall have been prepared or printed, with intent to use such plate, die, or block, or cause or suffer the same to be used, in forging or counterfeiting any of the notes issued as afore- Having false said, or shall have in his custody or possession any blank notes, note or notes engraved and printed after the similitude of any notes issued as aforesaid, with intent to use such blanks, or cause or suffer the same to be used in forging or coun terfeiting any of the notes issued as aforesaid, or shall have -or paper adapt- in his custody or possession any paper adapted to the mak ing of such notes, and similar to the paper upon which any such notes shall have been issued, with intent to use such paper, or cause or suffer the same to be used, in forging or counterfeiting any of the notes issued as aforesaid, every such person, being thereof convicted by due course of law, shall be sentenced to be imprisoned and kept to hard labor for a term not less than five or more than fifteen years, and fined in a sum not exceeding one thousand dollars. REPORT OF COMPTROLLER. comptroller s re- SEC. 61. And be it further enacted, That it shall be the rn^nTwha^ dut 7 of the Comptroller of the Currency to report annually to contain. to Congress at the commencement of its session REPORT OF COMPTROLLER. 14] First. A summary of the state and condition of every association from whom reports have been received the pre ceding year, at the several dates to which such reports refer, with an abstract of the whole amount of banking capital returned by them, of the whole amount of their debts and liabilities, the amount of circulating notes outstanding, and the total amount of means and resources, specifying the amount of lawful money held by them at the times of their several returns, and such other information in relation to said association as in his judgment may be useful. Second. A statement of the associations whose business has been closed during the year, with the amount of their circulation redeemed and the amount outstanding. Third. Any amendment to the laws relative to banking by which the system may be improved, and the security of the holders of its notes and other creditors may be increased. Fourth. The names and compensation of the clerks em ployed by him, and the whole amount of the expenses of the banking department during the year. And such report shall be made by or before the first day of December in each year, and the usual number of copies for the use of the Senate and House, and one thousand copies for the use of the Department, shall be printed by the Public Printer and in readiness for distribution at the first meeting of Con gress. FOKMER ACT REPEALED. SEC. 62. And be it further enacted , That the act entitled Repeal of act of "An act to provide a national currency, secured by a pledge February 25> 18G3t of United States stocks, and to provide for the circulation and redemption thereof," approved February twenty-fifth, eighteen hundred and sixty-three, is hereby repealed: Pro vided, That such repeal shall not affect any appointments saving clause. made, acts done, or proceedings had, or the organization, acts, or proceedings of any association organized or in the process of organization under the act aforesaid: And pro vided., also, That all such associations so organized or in Privileges of this process of organization shall enioy all the rights and priv- act conferre * on 7 . banks organized ileges granted, and be subject to all the duties, liabilities, under former act and restrictions imposed by this act, and with the approval 142 BANKING LAWS. of the Comptroller of the Currency, in lieu of the name spe cified in their respective organization certificates, may take any other name preferred by them and duly certified to the Comptroller, without prejudice to any right acquired under this act, or under the act hereby repealed; but no such chan-ge shall be made after six months from the passage of this act : Provided, also, That the circulation issued or to be issued by such association shall be considered as a part of the circulation provided for in this act. LIABILITY OF EXECUTORS, TRUSTEES, &C. Estates hold by SEC. 63. And be it further enacted, That persons holding executors, &c., to g oc k ag executors, administrators, guardians, and trustees. be liable. shall not be personally subject to any liabilities as stock holders ; but the estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward, or person interested in said trust funds would be if they were respectively living and competent to act and hold the stock in their own names. AMENDMENT AND REPEAL OF ACT. congress may re- SEC. 64, And be it further enacted, That Congress may at peal or alter act. an ^ ^ ime amend, alter, or repeal this act. Approved June 3, 1864. ACT OF JUNE 30, 1864, CHAPTER 173. AN ACT TO PROVIDE INTERNAL REVENUE FOR THE SUPPORT OF THE GOVERN MENT, TO PAY INTEREST ON THE PUBLIC DEBT, AND FOR OTHER PURPOSES. TAXES ON BANKS AND BANKERS, OTHER THAN NATIONAL BANKS. Tax on average SEC. 110. And be it further enacted, That there shall be deposits. levied, collected, and paid a tax of one twenty-fourth of one per centum each month 3 1 upon the average amount of the deposits of money, subject to payment by check or draft, or represented by certificates of deposit or otherwise, whether 31. Taxes imposed by tbis section are now payable semi-annually, on the first day of January and July, by the act of June 6, 1872, chapter 315, sec tion 37. (Seepage 158.) TAXES ON STATE BANKS, &c. 143 payable on demand or at some future day, with any person, bank, association, company, or corporation engaged in the business of banking ; And a tax of one twenty-fourth of one per centum each ou capital. month, 31 as aforesaid, upon the capital of any bank, asso ciation, company, or corporation, and on the capital em ployed 32 by any person in the business of banking beyond the average amount invested in United States bonds. And a tax of one-twelfth of one per centum each month 3 1 on circulation, upon the average amount of circulation issued by any bank, association, corporation, company, or person, including as circulation all certified checks and all notes and other obli gations calculated or intended to circulate or to be used as money, but not including that in the vault of the bank, or redeemed and on deposit for said bank ; and an additional tax of one-sixth of one per centum,, each month, upon the average amount of such circulation, issued as aforesaid, be yond the amount of ninety per centum of the capital of any such bank, association, corporation, company, or person. And a true and accurate return of the amount of circu- Returns to be lation, of deposit, and of capital, as aforesaid, and of the amount of notes of persons, State banks, or State banking associations, paid out by them for the previous month, shall be made and rendered monthly by each of such banks, asso ciations, corporations, companies, or persons, to the assessor of the district in which any such bank, association, corpora tion, or company may be located, or in which such person has his place of business, with a declaration annexed thereto, and the oath or affirmation of such person, or of the presi dent or cashier of such bank, association, corporation, or company, in such form and manner as may be prescribed by the Commissioner of Internal Revenue, that the same con tains a true and faithful statement of the amounts subject to tax as aforesaid ; and for any refusal or neglect to make 31. See note on preceding page. 32. The act of June 6, 1872, chapter 315, section 37, provides that " capital employed" shall not include money borrowed or received from day to day, in the usual course of hanking business, from any person not a partner of, or interested in, the said bank, association, or firm. 14,4 BANKING LAW to. or to render return and payment, any sucVi bank, associa tion, corporation, company, or person so in default shall be subject to and pay a penalty of two hundred dollars, besides the additional penalty and forfeitures in other cases provided by law; and the amount of circulation, deposit, capital, and notes of persons, State banks, and banking associations, paid out as aforesaid, in default of the proper return, shall be estimated by the assessor or assistant assessor of the district as aforesaid upon the best information he can obtain ; and every such penalty may be recovered for the use of the United States in any court of competent jurisdiction. on hanks with And in the case of banks with branches, the tax herein provided for shall be assessed upon the circulation of each branch severally, and the amount of capital of each branch shall be considered to be the amount allotted to such branch ; Repeal of former And so much of an act entitled "An act to provide ways and means for the support of the Government," approved March three, eighteen hundred and sixty-three, as imposes any tax on banks, their circulation, capital, or deposits, other than is herein provided, is hereby repealed: Act not to apply Provided, That this section shall not apply to associa- to national banks. tiong ^kh are taxed under and by virtue of the act "to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redernp- r,vings bank*, tion thereof." A ad the deposits in associations or com panies known as provident associations, savings banks, savings funds, or savings institutions, having no capital stock, and doing no other business than receiving deposits to be loaned or invested for the sole benefit of the parties making such deposits, without profit or compensation to the association or company, shall be exempt from tax on so much of their deposits as they have invested in securities of the United States, and on all deposits less than five hundred dollars 33 made in the name of any one person; and the returns required to be made by such provident institutions and savings banks after July, eighteen hundred 33. The exemption is extended to two thousand dollars by the act of June 6, 1872, chapter 315, section 37. TAX ON STATE BANK NOTES, &c. 145 and sixty-six, shall be made on the first Monday of January and July of each year, in such form and manner as may be prescribed by the Commissioner of Internal Revenue. [As amended by the act of July 13, 1866, chapter 184, 9.] ACT OF MARCH 3, 1865, CHAPTER 78. AN ACT TO AMEND AN ACT ENTITLED "AN ACT TO PROVIDE INTERNAL REVENUE TO SUPPORT THE GOVERNMENT, TO PAY INTEREST ON THE PUBLIC DEBT, AND FOR OTHER PURPOSES," APPROVED JUNE 30, 1864. TAX ON NOTES OF STATE BANKS, &C. SEC. 6. And be it further enacted, That every national Ten per ceu:, ta banking association, State bank, or State banking associa- sonsand state 1 " tion, shall pay a tax of ten per centum 34 on the amount banks used for of notes of any person, State bank, or State banking associa tion, used for circulation and paid out by them after the first day of August, eighteen hundred and sixty-six, and such tax shall be assessed and paid in such manner as shall be prescribed by the Commissioner of Internal Revenue. [As amended by act of July 13, 1866, chapter 184, 9 bis.] CONVERSION OF STATE BANKS WITH BRANCHES. SEC. 7. * * * Provided, That it shall be lawful for State banks with anv bank or banking association organized under State jj ranches *y J e <- p become national laws, and having branches, the capital being joint and banks and retain assigned to and used by the mother bank and branches in 34. This section, taxing banks ten per cent, on the amount of notes of State banks paid out by them, is held to be constitutional by the Supreme Court of the United States. ( Veazie Bank v. Fenno, 8 Wallace, 534.) The tax applies to the notes which a bank pays out of its own issue as well as of the issue of other banks. (Official Opinion of Attorney General Wil liams, 1872; Veazie Bank v. Fenno, 8 Wallace, 53-1.) The act of March 26, 1867, chapter 8, section 2, lays a tax of ten per cent, on the notes of any town, city, or municipal corporation paid out for circulation. (Seepage 148 ) And the act of July 17, 1862, chapter 196, section 2, makes it a penal offence to make, issue, circulate, or pay any note, check, memorandum, token, or other obligation for a less sum than one dollar, intended to circulate as money, or to be received or used in lieu of lawful money. (Seepage 45.) 10 146 BANKING LAWS. G. .pital of State banks converted. Circulation not taxable when it doe? not exceed five per cent, of capital. National banks converted from Btate banks definite proportions, to become a national banking associa tion in conformity with existing laws, and to retain and keep in operation its branches, or such one or more of them as it may elect to retain ; the amount of the circula tion redeemable at the mother bank and each branch to be regulated by the amount of capital assigned to and used by each. ***** CAPITAL OF BANKS CONVERTED. SEC. 14. And be it further enacted, That the capital of any State bank or banking association, which has ceased or shall cease to exist, or which has been or shall be converted into a national bank, shall be assumed to be the capital as it existed immediately before such bank ceased to exist or was converted as aforesaid. CIRCULATION, WHEN NOT TAXABLE. And whenever the outstanding circulation of any bank, association, corporation, company, or person shall be re duced to an amount not exceeding five per centum of the chartered or declared capital existing at the time the same was issued, said circulation shall be free from taxation ; 3 5 and whenever any bank which has ceased to issue notes for circulation shall deposit in the Treasury of the United States, in lawful money, the amount of its outstanding cir culation, to be redeemed at par, under such regulations as the Secretary of the Treasury shall prescribe, it shall be exempt from any tax upon such circulation ; TAX ON STATE BANKS AFTER CONVERSION. And whenever any State bank or banking association has been converted into a national banking association, and such 35. This provision relieves banks which are withdrawing their circulation or have reduced it to five per cent, of their capital, for any reason, from the tax imposed on national banks by section 41 of the act of June 3, 1864, (see page 125,) and on State banks by section 110 of the act of June 30, 1864, as amended by the act of July 13, 1866, (see page 142,) but net from the ten per cent, tax imposed on amount of notes of any State bank or banking associa tion, whether notes of their own or those of other banks, by section 6 of the act of March 3. 1865, as amended by act of July 13, 1866, section 9. (See page 145.) (Official Opinion of Attorney General Williams, 1872,) THREE PER CENT. CERTIFICATES. 147 national banking association has assumed the liabilities of to ray tax due such State bank or banking association, including the re- maiTo return^, &c. demption of its bills, by any agreement or understanding whatever with the representatives of such State bank or banking association, such national banking association shall be held to make the required return and payment on the circulation outstanding, so long as such circulation shall exceed five per centum of the capital before such conversion of such State bank or banking association. [As amended by act of July 13, 1866, chapter 184, 9 bis.] ACT OF MARCH 2, 1867, CHAPTER 194. AN ACT TO PEOVIDE WAYS AND MEANS FOR THE PAYMENT OF COMPOUND-INTER EST NOTES. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That for Temporary loan the purpose of redeeming and retiring any compound-inter- certificates 11 ent est notes outstanding, the Secretary of the Treasury is hereby authorized and directed to issue temporary loan certificates, 36 in the manner prescribed by section four of the act entitled "An act to authorize the issue of United States notes and for the redemption or funding thereof, and for funding the floating debt of the United States," ap proved February twenty-fifth, eighteen hundred and sixty- two, bearing interest at a rate not exceeding three per centum per annum, principal and interest payable in law ful money on demand ; And said certificates of temporary loan may constitute May be held by and be held, by any national bank holding or owning the same, as a part of the reserve provided for in sections thirty- one and thirty-two of the act entitled "An act to provide a national currency, secured by a pledge of United States bonds, and to provide for the circulation and redemption 36. By the act of July 25, 1868, chapter 237, the amount of temporary loan certificates to be issued was increased to seventy-five millions dollars, and by the act of July 12, 1870, chapter 252, section 2, they are all required to bo called in for payment as fast as additional currency uotes are issued under that act. When called in for payment they cease to bear interest, and can. no longer be held as part of the bank reserves. (Seepage 28.) 148 BANKING LAWS. thereof," approved June three, eighteen hundred and sixty- four : Provided, That not less than two-fifths of the entire reserve of such bank shall consist of lawful money of the United States: And provided further, That the amount of such temporary certificates at any time outstanding shall not exceed fifty millions of dollars. Approved, March 2, 1867. Banks and bank ers to pay ten per cent tax on amount of notes -if tnv/ns, cities, and municipal corporation? paid out by them. ACT OF MARCH 26, 1867, CHAPTER 8. AN ACT TO EXEMPT WRAPPING PAPER, MADE FROM WOOD OR CORNSTALKS, FROM INTERNAL TAX, AND FOR OTHER PURPOSES. SEC. 2. And be it further enacted, That every national banking association, State bank, or banker, or association shall pay a tax of ten per centum on the amount of notes of any town, city, or municipal corporation paid out by them after the first day of May, anno Domini eighteen hundred and sixty-seven, to be collected in the mode and manner in which the tax on the notes of State banks is collected. Approved, March 26, 1867. Whore ohares of banks may be taxed. Shares of non residents. ACT OF FEBRUARY 10, 1868, CHAPTER 7. AN ACT IN RELATION TO TAXING SHARES IN NATIONAL BANKS. Be it enacted by the Senate and House*of Representatives of the United States of America in Congress assembled, That the words "place where the bank is located, and not else where," in section forty-one of the " act to provide a national currency," approved June third, eighteen hundred and sixty-four, shall be construed and held to mean the State within which the bank is located; and the Legislature of each State may determine and direct the manner and place of taxing all the shares of national banks located within said State, subject to the restriction that the taxation shall not be at a greater rate than is assessed upon any other moneyed capital in the hands of individual citizens of such State: And provided always, That the shares of any na tional bank owned by non-residents of any State shall be REPORTS OF NATIONAL BANKS. 149 taxed in the city or town where said bank is located,, and not elsewhere. Approved, February 10, 1868. ACT OF FEBRUARY 19, 1809, CHAPTER 32. AN ACT TO PREVENT LOANING MONEY UPON UNITED STATES NOTES. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That offering or re- no national banking association shall hereafter offer or re- notes^s security ceive United States notes or national bank notes as security for loans, or ,, , P r. P agreeing to with- or as collateral security lor any loan ot money, or lor a con- hold same from sideration shall agree to withhold the same from use, or use ~ ~ how punished. shall offer or receive the custody or promise of custody of such notes as security, or as collateral security, or consider ation for any loan of money; and any national banking association offending against the provisions of this act shall be deemed guilty of a misdemeanor, and, upon conviction thereof in any United States court having jurisdiction shall be punished by a fine not exceeding one thousand dollars, and by a further sum equal to one-third of the money so loaned ; and the officer or officers of said bank who shall make such loan or loans shall be liable for a further sum equal to one-quarter of the money so loaned ; and the prose cution of such offenders shall be commenced and conducted as provided for the punishment of offenses in an act to provide a national currency, approved June third, eight een hundred and sixty-four, and the fine or penalty so recovered shall be for the benefit of the party bringing such suit. Approved, February 19, 1869. ACT OF MARCH 3, 1869, CHAPTER 130. AN ACT REGULATING THE REPORTS OF NATIONAL BANKING ASSOCIATIONS. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That Banks to make in lieu of all imports required by section thirty-four of the national currency act, every association shall make to the 150 BANKING LAWS. Details of reports Reports to be ef-nt to the Comp troller; lished. Comptroller of the Currency not less than five reports dur ing each and every year, according to the form which may be prescribed by him, verified by the oath or affirmation of the president or cashier of such association, and attested by the signature of at least three of the directors ; which report shall exhibit, in detail and under appropriate heads, the resources and liabilities of the association at the close of business on any past day to be by him specified, and shall transmit such report to the Comptroller within five days after the receipt of a request or requisition therefor from him; and the report of each association above required, in the same form in which it is made to the Comptroller, shall -also to be pub- be published in a newspaper published in the place where such association is established, or if there be no newspaper in the place, then in the one published nearest thereto in the same county, at the expense of the association ; and such proof of publication shall be furnished as may be re quired by the Comptroller. And the Comptroller shall have power to call for special reports from any particular association whenever in his judgment the same shall be necessary in order to a full and complete knowledge of its condition. Any association failing to make and transmit any such report shall be subject to a penalty of one hundred dollars for each day after five days that such bank shall delay to make and transmit any report as aforesaid ; and in case any association shall delay or refuse to pay the penalty herein imposed when the same shall be assessed by the Comptroller of the Currency, the amount of such penalty may be retained by the Treasurer of the United States, upon the order of the Comptroller of the Currency, out of the interest, as it may become due to the association, on the bonds deposited with him to secure circulation ; and all sums of money collected for penalties under this section shall be paid into the Treasury of the United States. SEC. 2. And be it further enacted, That, in addition to said reports, each national banking association shall report to the Comptroller of the Currency the amount of each divi dend declared by said association, and the amount of net Special reports. Penalties. Additional re- po;-ts of divi dends and net CERTIFYING CHECKS. 151 earnings in excess of said dividends, which report shall be made within ten days after the declaration of each dividend, and attested by the oath of the president or cashier of said association, and a failure to comply with the provisions of this section shall subject such association to the penalties provided in the foregoing section. Approved, March 3, 1869. ACT OF MARCH 3, 1869, CHAPTER 135. AN ACT IN REFERENCE TO CERTIFYING CHECKS BY NATIONAL BANKS. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That checks not to be it shall be unlawful for any officer, clerk, or agent of any ^wn^gain^L national bank to certify any check drawn upon said bank tuai deposits, unless the person or company drawing said check shall have on deposit in said bank at the time such check is certified an amount of money equal to the amount specified in such check ; and any check so certified by duly authorized officers certified checks shall be a good and valid obligation against such bank; and Anally for viola- any officer, clerk, or agent of any national bank violating tionof law. the provisions of this act shall subject such bank to the liabilities and proceedings on the part of the Comptroller as provided for in section fifty of the national banking law, approved June third, eighteen hundred and sixty-four. Approved, March 3, 1869. ACT OF APRIL 6, 1869, CHAPTER 11. AN ACT TO AMEND AN ACT ENTITLED "AN ACT TO PROVIDE A NATIONAL CUR RENCY SECURED BY A PLEDGE OF UNITED STATES BONDS, AND TO PROVIDE FOR THE CIRCULATION AND REDEMPTION THEREOF," APPROVED JUNE THIRD, EIGH TEEN HUNDRED AND SIXTY-FOUR, BY EXTENDING CERTAIN PENALTIES TO ACCESSORIES. Be it enacted by the Senate and House of Representatives Aiding or abet- of the United States of America in Congress assembled, That tin * officers &c - J of banks, in em- every person who shall aid or abet any officer or agent of any bezziementof association in doing any of the acts enumerated in section un^awfu fifty-five of an act entitled "An act to provide a national punishable. 152 BANKING LAWS. currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof/ ap proved June third, eighteen hundred and sixty-four, with intent to defraud or deceive, shall be liable to the same punishment therein provided for the principal. Approved, April 6, 1869. To what officers penalty against embezzlement shall apply. ACT OF JULY 8, 1870, CHAPTER 226. AN ACT TO DECLAEE THE CONSTRUCTION OF .SECTION FIFTY-FIVE OF AN ACT ENTITLED "AN ACT TO PROVIDE A NATIONAL CURRENCY SECURED BY A PLEDGE OF UNITED STATES BONDS, AND TO PROVIDE FOR THE CIRCULATION AND RE DEMPTION THEREOF," APPROVED JUNE THREE, EIGHTEEN HUNDRED AND SIXTY-FOUR, AND THE ACTS AMENDATORY THEREOF AND TO AMEND THE SAME. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section fifty-five of the act entitled u An act to provide a na tional currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof," approved June three, eighteen hundred and sixty-four, and all acts amendatory of said section, shall be construed to apply to every president, director, cashier, teller, clerk, or agent of any banking association, whether organized under the aforesaid act or under the act entitled "An act to pro vide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof," approved February twenty-five, eighteen hundred and sixty-three. Approved, July 8, 1870. ACT OF JULY 12, 1870, CHAPTER 252. AN ACT TO PROVIDE FOR THE REDEMPTION OF THE THREE PER CENT. TEMPOR ARY LOAN CERTIFICATES, AND FOR AN INCREASE OF NATIONAL BANK NOTES. Be it enacted by the Senate and House of Representatives ionrj oircu- of the United States of America in Congress assembled, That author- fifty-four millions of dollars in -notes for circulation may be J ized $54,000,000. issued to national banking -associations, in addition to the INCREASE OF BANK CIRCULATION. 153 three hundred millions of dollars authorized by the twenty- second section of the "Act to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof," approved June three, eighteen hundred and sixty-four ; And the amount of notes so provided shall be furnished HOW distributed, to banking associations organized or to be organized in those States a,nd Territories having less than their proportion under the apportionment contemplated by the provisions of the "Act to amend an act to provide a national currency, secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof," approved March three, eighteen hundred and sixty-five, and the bonds de posited with the Treasurer of the United States, to secure the additional circulating notes herein authorized, shall be of any description of bonds of the United States bearing interest in coin, but a new apportionment of the increased circulation herein provided for shall be made as soon as practicable, based upon the census of eighteen hundred and seventy: Provided, That if applications for the circulation herein authorized shall not be made within one year after the passage of this act by banking associations organized or to be organized in States having less than their propor tion, it shall be lawful for the Comptroller of the Currency to issue such circulation to banking associations applying for the same in other States or Territories having less than their proportion, giving the preference to such as have the greatest deficiency ; And provided further , That no banking association here- circulation after organized shall have a circulation in excess of five nouTexeeed" hundred thousand dollars. $500,000 each. SEC. 2. And be it further enacted, That at the end of each comptroller to month after the passage of this act it shall be the duty of 2S t ^^ the Comptroller of the Currency to report to the Secretary of the Treasury the amount of circulating notes issued, under the provisions of the preceding section, to national banking associations during the previous month; Whereupon the Secretary of the Treasury shall redeem Three per cent, and cancel an amount of the three per centum temporary c 154 BANKING LAWS. redeemed and loan certificates issued under the acts of March two, eighteen hundred and sixty-seven, and July twenty-five, eighteen hundred and sixty-eight, not less than the amount of cir culating notes so reported, and may, if necessary, in order to procure the presentation of such temporary loan certifi- Notice to holders cates for redemption, give notice to the holders thereof, by of three per cent. p u "bli ca tion or otherwise, that certain of said certificates certificates. (which shall be designated by number, date, and amount) shall cease to bear interest from and after a day to be desig nated in such notice, and that the certificates so designated shall no longer be available as any portion of the lawful monev reserve in possession of any national banking asso- ciation, and after the day designated in such notice no in terest shall be paid on such certificates, and they shall not thereafter be counted as a part of the reserve of any banking association. NO longer to be Banks may have circulation of each. Reserve of 25 per cent, of circuia- tion to be kept in coin. NATIONAL GOLD BANKS AND GOLD NOTES. SEC. 3. And be it further enacted, That upon the deposit of an ^ United States bonds, bearing interest payable in gold, with the Treasurer of the United States, in the man ner prescribed in the nineteenth and twentieth sections of the national currency act, it shall be lawful for the Comp troller of the Currency to issue to the association making the same circulating notes of different denominations, not less than five dollars, not exceeding in amount eighty per centum of the par value of the bonds deposited, which notes shall bear upon their face the promise of the association to which they are issued to pay them, upon presentation at the office of the association, in gold coin of the United States, and shall be redeemable upon such presentation in such coin : Provided, That no banking association organ- * zec ^ under ^is section shall have a circulation in excess of one million of dollars. SEC. 4. And be it further enacted, That every national banking association formed under the provisions of the pre- . n i in n ceding section 01 this act shall at all times keep on hand not less than twenty-five per centum of its outstanding cir culation in gold or silver coin of the United States, and RE-DISTRIBUTION OF BANK CIRCULATION. 155 receive at par in the payment of debts the gold notes Goia notes ro of every other such banking association which at the time of such payments shall be redeeming its circulating notes in gold coin of the United States. SEC. 5. And be it further enacted, That every association National gold organized for the purpose of issuing gold notes as provided genernib^nking 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 of section twenty-two,, which limits the circulation of na tional banking associations to three hundred millions of dollars; the first clause of section thirty-two, which, taken in connection with the preceding section, would require national banking associations organized in the city of San Francisco to redeem their circulating notes at par in the city of New York ; and the last clause of section thirty- two, which requires every national banking association to receive in payment of debts the notes of every other national banking association at par: Provided, That in applying the provisions and requirements of said act to the bank ing 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. SEC. 6. And be it further enacted, That to secure a more Redistribution of equitable distribution of the national banking currency circulation to ex - 1 ... . . tent of $-5,000,000 there may be issued circulating notes to banking associa- may be made to tions organized in States and Territories having less than ^"ofhalTn^ their proportion as herein set forth. And the amount of their proportion, circulation in this section authorized shall, under the direc- tiori 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 circula tion exceeding that provided for by the act entitled "An act to amend an act entitled c An act to provide for a na tional banking currency secured by pledge of United States bonds, and to provide for the circulation and redemption thereof, " approved March three, eighteen hundred and 156 BANKING LAWS. flow reduction ?hall be made from States hav ing an excess. If banks fail to return circula tion when requir ed, their bonds to be sold and notes redeemed. sixty-five, but the amount so withdrawn shall not exceed twenty-five million dollars.* The Comptroller of the Currency shall, under the direc tion of the Secretary of the Treasury, make a statement showing the amount of circulation in each State and Terri tory, and the amount to be retired by each banking associa tion 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 circu lation 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 pro portion 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 duty of the Comptroller of the Currency to sell at public auc tion, having given twenty days notice thereof in one daily newspaper printed in Washington and one in New York city, an amount of bonds deposited by said association, as security for said circulation, equal to the circulation to be withdrawn from said association and not returned in com pliance 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 INSOLVENT BANKS TO RETIRE CIRCULATION. 15? Treasury, as will equal the amount required and not so re turned, 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 mil lions granted in the first section shall have been taken up. SEC. 7. And be it further enacted, That after the expira- Banks m suites tion of six months from the passage of this act any banking cSatomay association located in any State having more than its pro- remove to states -, . T T , a, z. i having less than portion of circulation may be removed to any btate 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. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That Banks in i every bank that has heretofore gone into liquidation under the provisions of section forty-two of the national currency outstanding eir 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 ^^go in States for its outstanding circulation within six months liquidation from 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 otuerwi -e up its bonds for thirty days after the expiration of the time ^^ s specified, the Comptroller of the Currency shall have power to sell the bonds pledged for the circulation of said bank 158 BANKING LAWS. Certain banks exempt from above provisions but to report as sets and liabili ties. 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 repre sentative : 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 pro vided 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 OP JUNE 6, 1872, CHAPTER 315. AN ACT TO REDUCE DUTIES ON IMPORTS AND TO REDUCE INTERNAL TAXES, AND FOR OTHER PURPOSES. 3 7 Taxes on State banks, bankers, &c., to be paid Femi-nnnually. SEC. 37". That the taxes imposed by section one hundred and ten of the act entitled u An act to provide internal 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 hun dred 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 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. savings banks And the exemption from tax, authorized by said section. What is to be con sideredas capital DEPOSITS IN SAVINGS BANKS. 159 of deposits of less than five hundred! dollars, made in the deposits to extent o1 exempt. name of one person, in associations or companies known as extent of S2 (XK provident institutions, savings banks, savings funds, or sav ings 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. NOTES RELATIVE TO TAXATION OF BANKS UNDER EXISTING LAWS. On and after October 1, 1872, no tax will be imposed on notes, bills of ex change, 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. (Sec 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 State 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, {foe p. 126.) 160 BANKING LAWS. REGULATIONS AND INSTRUCTIONS IN RELATION TO PAYMENT OF DUTIES BY NATIONAL BANKS. By the forty-first section of the act entitled "An act to provide a national currency, secured by a pledge of United States bonds and to provide for the redemption and circu lation thereof," approved June 3, 1864, it is made the duty of the Treasurer of the United States to prescribe the form -for making return, by each national banking association, of the average amount of its notes in circulation, the average amount of its deposits, and the average amount of its capi tal stock beyond the amount invested in United States bonds, for each half year from and after the first day of January, eighteen hundred and sixty-four. In compliance with this requirement, a form for such return has been pre pared, and copies are furnished herewith. Under the law, a return is to be made within ten days next succeeding the first days of January and July, in each and every year, for the preceding six months. The penalty for default in making the return within the time fixed is two hundred dollars. Items subject tr> duty. item? subject to The items made subject to duty by the act are circulating notes, deposits and capital stock. Dates of commencement of liability to duty. when to com The return of these items from all banks that have before made returns of them will be for the lull semi-annual term of 181, 182, or 184 days, as the case may be; and of all banks that have not before made returns of these items, as follows : Upon circulating notes, from and including the date of their first issue. Upon deposits, from and including the date of the first deposit received by the bank. Upon capital stock, from and including the date of the certificate of the Comptroller of the Currency authorizing the commencement of business as a national bank. PAYMENT OF DUTIES. 161 Amount of each item subject to duty. The amount of each item subject to duty is the average Amount, amount thereof for the half year for which duty is due. Rule for ascertaining average amounts. I. For banks making estimates from daily statements of balances. Add together the daily balances of the item, from the Average amount, proper date of the commencement of the liability of the item how a9certained to duty, (including for each Sunday and holiday the balance of the first preceding business day,) to and including the 30th day of June, or the 31st day of December, as the case may be. This aggregate of daily balances, for the first six months of any year, will be divided by 181, the number of days from January 1 to June 30, except in leap year, when the sum will be divided by 182. The aggregate of daily balances for the last six months of any year will be divided by 184, the number of clays from July 1 to December 31. II. For banks making estimates from weekly statements of balances. Banks not making daily statements, and which obtain their averages from weekly statements, should add together the weekly balances, including for each day, in any frac tional part of a week, one-seventh of the weekly balance next preceding such fractional part. The aggregate of bal ances for the first six months of any year will be divided by the number of weeks from January 1 to June 30, (25 6-7, or 26, as the case may be.) The aggregate of balances for the last six months will be divided by 26 2-7, the number of weeks from July 1 to December 31. (Banks having items subject to duty for periods less than a half year, which make their estimates from daily balances, will divide the aggregate of the balances of each item, for the time for which it is liable to duty, by the number of days in the half year ; and banks having like items, which make their estimates from weekly balances, by the number of weeks and fractions thereof in the half year.) The quotients thus found will be the average amounts subject to duty for each six months respectively, and should be entered in the statement under the heading "Dutiable amount," and duty is to be computed thereon at the full semi-annual rate. Duty on circulation. The duty on circulating notes is one-half of one per centum Duty on circuia- on the average amount outstanding for the six months. won. 11 1G2 BANKING LAWS. Liability on this item would commence on the first days of January and July in each and every year, unless a bank had at that time no circulation outstanding, in which case it would commence with the date of the first issue of notes, and terminate on the 30th day of June or the 31st day of December, (as the case may be,) date of commencement arid termination both included. Duty on deposits. or deposits. Under this head must be included the balances on hand, when the books of the bank are closed for the day, which are subject to payment on check or draft, or on return of certificate of deposit, (except deposits made to the credit of the Treasurer of the United States with a national bank depositary,) whether made by individuals, banks, savings banks, bankers, or by States, cities, or towns, whether cer tificates or certified checks have been issued therefor or not, and, in fact, all descriptions of deposits, except as above ex- cepted, which may be used by the bank, or from which it may derive profits, including deposits upon which the bank pays interest, whether any part of either of such items are directly in the possession of the bank or in the hands of an agent or agents. The average amount of deposits, including, in the case of a depositary, the average amount to the credit of the Treasurer of the United States from the first days of Janu ary and July, (or, in case the bank had not then commenced to receive deposits, from the date of the first deposit,) to the 30th of June, or the 31st of December, (as the case may be,) date of commencement and termination both included, will first be set down in the return. From this average amount, depositaries will be entitled to deduct the average amount on deposit to the credit of the Treasurer of the United States. Upon the remainder, which will be considered the deposits subject to duty, is to be levied a duty of one-fourth of one per centum semi-annually. Duty on capital stock. on capital stock. The capital stock on which duty is levied is held to be that portion of the paid-up capital stock which is in excess of the United States bonds owned by the bank. The aver age amount of the paid-up capital from the first days of January or of July (or, in case certificate of authority to commence business had not then been issued by the Comp troller of the Currency, from the date of such certificate) to the 30th day of June or the 31st day of December, date of PAYMENT OF DUTIES. 163 commencemeiit and termination both included, will first be set down in the return. From this average amount deduc tion will be made of the average amount of United States bonds, at their face value, owned by the bank, including the bonds on deposit with the Treasurer of the United States as security for circulation, or for other purposes. The rate of duty on capital stock is one-fourth of one per cent, semi-annually. The actual capital paid in will be returned, without re gard to the amount specially authorized. Thus, an institu tion should include in the capital liable to duty any increase which has been paid in, although such increase shall not at tke date of the return have received the approval of the Comptroller of the Currency. The term "United States bonds," as used in the act, is construed to mean only coupon or registered bonds, and not any portion of what is considered temporary debt, such as seven and three-tenths treasury notes, certificates of indebt edness, five per cent, notes, compound-interest notes, or temporary loan certificates. Payment of duty. The duty levied by the section referred to is required by payment of duty law to be paid to the Treasurer of the United States in the months of January and July in each and every year, in default of which payment provision is made for its collection by the Treasurer out of the interest on securities in his hands, and may be made in any one of the following ways: 1st. By a deposit of the amount of duty to the credit of the Treasurer of the United States, with him, or with any Assistant Treasurer of the United States, or designated de positary, including all national banks, designated as such, and including the bank making payment, if a depositary. Triplicate certificates should be issued therefor, the original of which must be forwarded to the Secretary of the Treasury, the duplicate to the Treasurer, and the triplicate held by the party making the deposit, in which certificate it should be stated that the deposit is "on account of semi-annual duty." Depositaries should be careful to distinguish the deposit on this account , as a duty from banks, so as not to confound it with deposits on account of internal-revenue tax, to which latter class it does not belong, and should make the certifi cate therefor in the name of the depositing bank, and not in MIO name or one of its officers. 2d. J3y remittance to this office of the amount of duty in hi \viiil nioaoy of the United States, or the notes of national 164 BANKING LAWS. banks ; the expense and risk of transmission to be borne by the party remitting. 3d. By draft payable to the order of the Treasurer of the United States, on either of the cities of Washington, New York, Boston, or Philadelphia, to be made payable in the lawful money of the United States, or the notes of national banks. Payment will not be considered in such cases as having been made until the drafts shall have been collected, and in no case until the semi-annual statement has been examined at this office. When the draft is collected, certificates of payment of duty will be forwarded by the Treasurer to the bank. National banks should be careful always to insert the name of the State in which they are located, and to address all correspondence relating to semi-annual duty to the Treasurer of the United States, ACTS OF CONGRESS. ACT OF JUNE 29, 1874. AN ACT FIXING THE AMOUNT OF UNITED STATES NOTES, PROVIDING FOE A RE DISTRIBUTION OF THE NATIONAL BANK CURRENCY, AND FOR OTHER PURPOSES. DESIGNATION OF BANK ACT. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the act entitled "An act to provide a national currency secured Designation of by a pledge of United States bonds, and to provide for the circulation and redemption thereof," approved June 3, 1864, shall hereafter be known as " the national bank act." see page 101. BANK RESERVES. SEC. 2. That section 31 of "the national bank act" be Banks not to so amended that the several associations therein provided reTe p reVn ac- a for shall not hereafter be required to keep on hand any lation. amount of money whatever by reason of the amount of their respective circulations ; but the moneys required by said section to be kept at all times on hand shall be deter mined by the amount of deposits in all respects, as pro- see page iao. vided for in the said section. REDEMPTION OF CIRCULATION. SEC. 3. That every association organized, or to be organ- to- keep 5 per n -1,1 /> ji -i t n ,1 i cent, of reserves ized, under the provisions of the said act, and of the several in united states i * i 11 11 i it Treasury for re acts amendatory thereof, shall at all times keep and have demotion of eir- on deposit in the Treasury of the United States, in lawful money of the United States, a sum equal to 5 per centum of its circulation, to be held and used for the redemption of such circulation; which sum shall be counted as a part see page lao. of its lawful reserve, as provided in section 2 of this act; And when the circulating notes of any such associations, circulation, how assorted or unassorted, shall be presented for redemption in sums of $1,000 or any multiple thereof to the Treasurer of the United States, the same shall be redeemed in United (165) 168 BANKING LAWS. States notes. All notes so redeemed shall be charged by the Treasurer of the United States to the respective asso ciations issuing the same, and he shall notify them severally on the first day of each month, or oftener, at his discretion, of the amount of such redemptions; and whenever such redemptions for any association shall amount to the sum of $500, such association so notified shall forthwith deposit with the Treasurer of the United States a sum in United States notes equal to the amount of its circulating notes so Notes mutilated, redeemed. And all notes of national banks, worn, defaced, A-c., to be for- -IT warded by assist- mutilated, or otherwise unfit for circulation, shall, when ant treasurers, &c., for redemp- received by any assistant treasurer or at any designated tion. " o depository of the United States, be forwarded to the Treas urer of the United States for redemption as provided herein. And when such redemptions have been so reim bursed, the circulating notes so redeemed shall be for warded to the respective associations by which they were issued; but if any of such notes are worn, mutilated, defaced, or rendered otherwise unfit for use, they shall be forwarded to the Comptroller of the Currency and de stroyed, and replaced as now provided by law: Banks to pay cost Provided, That each of said associations shall reimburse of transportation. . ,, rn IP to the .treasury the charges for transportation and the costs for assorting such notes ; and the associations here after organized shall also severally reimburse to the Treas ury the cost of engraving such plates as shall be ordered by each association respectively; and the amount assessed upon each association shall be in proportion to the circu lation redeemed, and be charged to the fund on deposit with the Treasurer: Banks to redeem And provided further, That so much of section 32 of said thef* own" count- national bank act requiring or permitting the redemption ers or at United ,. ., . , ,. . ., smtes Treasury, or its circulating notes elsewhere than at its own counter, seepage i3. except as provided for in this section, is hereby repealed. WITHDRAWAL OF CIRCULATION. Banks desiring SEC. 4. That any association organized under this act, or to withdraw then r> ,*, ,, -, . , . , . , . . fircuiation and any or the acts or winch this is an amendment, desiring to bonds may de- i i posit united withdraw its circulating notes, in whole or in part may, btntes notes. L J HE-DISTRIBUTION OF BANK CIRCULATION. 167 upon the deposit of lawful money with the Treasurer of the United States in sums of not less than $9,000, take up the bonds which said association has on deposit with the Treasurer for the security of such circulating notes; which bonds shall be assigned to the bank in the manner specified in the nineteenth section of the national bank act; and the outstanding notes of said association, to an amount equal see pnjros to the legal-tender notes deposited, shall be redeemed at the Treasury of the United States, and destroyed as now provided by law: Provided, That the amount of the bonds on deposit for circulation shall not be reduced below 50,000. CHARTER NUMBER ON NOTES. Sec. 5. That the Comptroller of the Currency shall, under charter number* 01 m to be printed on fctich rules and regulations as the Secretary of the Treasury notes. nuvv prescribe, cause the charter numbers of the associa tion to be printed upon all national bank notes which may seepage : is. be hereafter issued by him. LIMIT OF UNITED STATES NOTES. SEC. 6. That the amount of United States notes outstand- Amount of ing and to be used as apart of the circulating medium shall notes limited. not exceed the sum of 382,000,000, which said sum shall see pa^es ss, appear in each monthly statement of the public debt, and no part thereof shall be held or used as a reserve. REDISTRIBUTION OF BANK CIRCULATION. SEC. 7. That so much of the act entitled "An act to pro- Redistribution oi . -. . n -i fifty-five millions vide for the redemption of the 3 per centum temporary circulation from , . , banks in States loan certificates, and for an increase of national bank having above . their proportion notes, as provides that no circulation shall be withdrawn, to banks instates having less. under the provisions of section 6 of said act, until after the fifty-four millions granted in section 1 of said act shall have been taken up, is hereby repealed; see page 155, Audit shall be the duty of the Comptroller of the Cur rency, under the direction of the Secretary of the Treasury, to proceed forthwith, and he is hereby authorized and re- 168 BANKING LAWS. Proceedings upon banks fail ing to comply with order of Comptroller to withdraw circu lation. quired, from time to time, as applications shall be duly made therefor, and until the full amount of 55,000,000 shall be withdrawn, to make requisitions upon each of the national banks described in said section, and in the manner therein provided, organized in States having an excess of circulation, to withdraw and return so much of their circu lation as by said act may be apportioned to be withdrawn from them, or, in lieu thereof, to deposit in the Treasury of the United States lawful money sufficient to redeem such circulation, a nd upon the return of the circulation required, or the deposit of lawful money, as herein provided, a pro portionate amount of the bonds held to secure the circula tion of such association as shall make such return or deposit shall be surrendered to it. SEC. 8. That upon the failure of the national banks upon which requisition for circulation shall be made, or of any of them, to return the amount required, or to deposit in the Treasury lawful money to redeem the circulation re quired, within thirty days, the Comptroller of the Currency shall at once sell, as provided in section 49 of the national currency act, approved June 3, 1864, bonds held to secure the redemption of the circulation of the association or asso ciations which shall so fail, to an amount sufficient to re deem the circulation required of such association or asso ciations, and with the proceeds, which shall be deposited sco page 133. in the Treasury of the United States, so much of the circu lation of such association or associations shall be redeemed as will equal the amount required and not returned ; and if there be any excess of proceeds over the amount required for such redemption, it shall be returned to the association or associations whose bonds shall have been sold. And it shall be the duty of the Treasurer, assistant treas urers, designated depositaries, and national bank deposit aries of the United States, who shall be kept informed by the Comptroller of the Currency of such associations as shall fail to return circulation as required, to assort and return to the Treasury for redemption the notes of such associations as shall come into their hands until the amount required shall be redeemed, and in like manner to assort RE-DISTRIBUTION OF BANK CIRCULATION. and return to the Treasury for redemption the notes of such national banks as have failed, or gone into voluntary liquidation for the purpose of winding up their affairs, and of such as shall hereafter so fail or go into liquidation. SEC. 9. That from and after the passage of this act it circulation to bo shall be lawful for the Comptroller of the Currency, and instates emitted , , , .,..,. . , to same, and new he is hereby required, to issue circulating notes, without banks may be oi> delay, as applications therefor are made, not to exceed the sum of $55,000,000, to associations organized, or to be or ganized, in those States and Territories having less than their proportion of circulation, under an apportionment made on the basis of population and of wealth, as shown by the returns of the census of 1870; and every association hereafter organized shall be subject to, and be governed by the rules, restrictions, and limitations, and possess the rights, privileges, and franchises, now or hereafter to be seepages prescribed by law as to national banking associations, with the same power to amend, alter, and repeal provided by u the national bank act;" Provided, That the whole amount of circulation with- Amount to be drawn and redeemed from banks transacting business shall not exceed 55,000,000, and that such circulation shall be withdrawn and redeemed as it shall be necessary to supply the circulation previously issued to the banks in those States having less than their apportionment: And provided further, That not more than $30,000,000 shall be withdrawn and redeemed as herein contemplated during the fiscal year ending June 30, 1875. APPROVED June 20, 1874. UNITED STATES BONDS CALLED IN FOE KEDEMPTION, BEING BONDS ISSUED UNDER ACT OF FEBRUARY 25, 1862 CALLED FIVE-TWENTIES OF 18G2. NOTE. For an account of this loan and a list of the bonds redeemable under the first, second, third, and fourth calls, see pages 17, 18, 19, and 20. Fifth calL FIFTH CALL. Notice dated June 6, 1873. Of the third series, all coupon bonds of $50 numbered 1,201 to 6,200 inclusive. $100 " 4,753 to 20,000 $500 " 3,001 to 10,700 $1,000 5,734 to 22,600 All registered bonds of $50 numbered 1,234 to 1,320 inclusive. $100 $500 $1,000 $5,000 $10,000 8,804 to 9,500 5,361 to 5,700 20,681 to 23,300 6,403 to 7,500 7,093 to 9,680 Which ceased to bear interest September 6, 1873. sixth caii. SIXTH CALL. Notice dated August 16, 1873, Of the third series, all coupon bonds of $50 numbered 6,201 to 10,200 inclusive. $100 " 20,001 to 30,750 $500 " 10,701 to 15,800 " $1,000 " 22,601 to 36,000 All registered bonds of $50 numbered 1,321 to 1,375 inclusive. $100 " 9,501 to 10,300 $500 " 5,701 to 6,100 $1,000 " 23,301 to 25,000 $5,000 " 7,501 to 7,900 $10,000 " 9,681 to 10,100 Which ceased to bear interest November 16, 1873. (170) BOSTDS CALLED IN FOR REDEMPTION. 171 SEVENTH CALL. Notice dated November 1, 1873. seventh can. Of the third series, all coupon bonds of- $50 numbered 10,201 to 10,600 inclusive. $100 " 30,751 to 34,000 $500 " 15,801 to 17,600 $1,000 " 36,001 to 41,000 All registered bonds of $50 numbered 1,376 to 1,410 inclusive. $100 " 10,301 to 10,560 $500 " 6,101 to 6,300 $1,000 " 25,001 to 25,650 $5,000 " 7,901 to 8,100 $10,000 " 10,101 to 10,320 Which ceased to bear interest February 1, 1874. EIGHTH CALL. Notice dated June 3, 1874. Eighth can. Of the third series, all coupon bonds of $50 numbered 10,601 to 12,100 inclusive. $100 " 34,001 to 37,400 $500 " 17,601 to 19,300 81,000 " 41,001 to 46,100 All registered bonds of $50 numbered 1,411 to 1,450 inclusive. $100 " 10,561 to 10/680 $500 " 6,301 to 6,390 $1 000 " 25,651 to 26,100 $5,000 " 8,101 to 8,300 $10,000 " 10,321 to 10,509 Which ceased to bear interest September 3, 1874. CALL. Notice dated June 5, 1874. ninth can. Of the third series, all coupon bonds of $50 numbered 12,101 to 12,200 inclusive. $100 " 37,401 to 38,200 $500 " 19,301 to 19,400 $1,000 46,101 to 47,300 All registered bonds of $50 numbered 1,451 to 1,460 inclusive. $100 " 10,681 to 10,700 $500 " 6,391 to 6,400 $1 000 " 26,101 to 26,166 $5,000 " 8,301 to 8,303 $10,000 " 10,510 to 10,517 Which ceased to bear interest September 5, 1874. A FULL DESCRIPTION OF THE FUNDED AND BONDED DEBTS OF THE DISTRICT OF COLUMBIA, INCLUDING THOSE OF THE CITIES OF WASHINGTON AND GEORGETOWN. The intimate and dependent relation which the District of Colum bia bears to Congress and to the United States Government, as well as the measures taken by the latter by the act of June 20, 1874, to fund the floating debt of the District (which will embrace nearly one half of the whole general indebtedness) into bonds, for the payment j/ which the faith of the United States is thereby pledged, leads to the general understanding and conclusion that all the debts of the Dis- T^ O trict contracted under the forms of local government, which Con gress has at different periods set up and organized therein, may be regarded as so far debts or obligations of the United States that Con gress will make all the provisions necessary for the prompt payment of the same, principal and interest, either by taxation or by appro priations out of the National Treasury. The Constitution, in clause 17, section 8, article 1, confers upon Congress the power " to exercise exclusive legislation in all cases whatsoever over such District, (not exceeding ten miles square,) as may, by cession of particular States and the acceptance of Congress, become the seat of Government of the United States." This territory was ceded to the United States for that purpose, and neither the people residing therein nor the States have any control over the same, except such as maybe authorized by Congress. (173) 174 DEBTS OF THE DISTRICT OF COLUMBIA. The Judiciary Committee of the House of Representatives of the Forty-third Congress, in a report, says : "In strict legal sense, there can be said to be no such thing as a local government of the District of Columbia, for there can he no government within the District independent of that of the Federal Government; and whatever local authority there maybe now ex isting, or which may be hereafter set up within the District, it can only be regarded legally as an agency of the Federal Government; and whatever authority this local government may exercise, it must be regarded as the act of the United States through their delegated representative." The people can neither create debts nor raise money by taxation to carry on a government therein of any kind, nor to pay outstanding obligations, unless first authorized by Congress to form a govern ment. The debts hereinafter described have all been created under local governments, set up and organized by Congress, acting according to the report of the Judiciary Committee above referred to, as the " agents of the Federal Government," and such obligations must be regarded as the " acts of the United States through their delegated representatives." For a time there were three separate local governments set up by Congress: those of the city of Washington, the city of Georgetown, and the county of Washington outside of said cities. Subsequently they were all abolished, and a general government for the whole District established, with a governor, council, and legislative assem bly, which latter was abolished as to said officers by the act of Juno 20, 1874, and steps thereby taken for establishing a new form, witi better defined rights, powers, and relations to the Federal Gov^si raent. Exactly what this new form of government will be remains to be determined by the future action of Congress. Each of these governments while in existence incurred obligations and created debts which are described in the following pages, all of which it is supposed Congress will provide for as it has by the act of June 20, 1874, for the floating debt of some eight million dollars. These considerations make it proper, in any description of the debts of the United States, to include also those of the District of Columbia, as the Pacific railroad bonds are included. (See page 31.) DEBTS OF THE DISTRICT OF COLUMBIA. 175 Bonded debt of the District of Columbia, including the cities of Washington and Georgetown, July, 1874. Description. Amount. Rate of interest. When payable. 1 2 3 4 5 6 7 DISTRICT OF COLUMBIA. Permanent improvement, (sixes) Permanent improvement, or eight een years bonds, (sevens) Permanent improvement, or eight een years bonds, (sevens) Water stock bonds of 1871 Water stock bonds of 1873 Market stock bonds Chicago relief bonds $4,000,000 00 260,000 00 530,000 00 450,000 00 35,000 00 152,400 00 100,000 00 6 coin. 7 curr. 7 curr. 7 curr. 7 curr. 7 curr. 7 curr. July 1, 1891. July 1, 1891. July 1, 1891. October 1, 1901. October 1, 1903. July 26, 1892. Januarv 1 1877. 8 9 10 11 Guaranteed bonds, (U. S.,) estimated. Funding loan bonds, (Congress) Funding loan bonds. (Legislature, ratified by Congress June 20, 1874). County school bonds . .. 8,000,000 00 1,150,000 00 1,600,000 00 18 700 00 3i 6 oV 6 com. 6 coin. 7 curr August 1, 1924. July 1, 1892. November 1, 1892. July 1 1874 75 12 13 Georgetown steam force-pump bonds. CITY OF WASHINGTON. Five per cent, stock 8,500 00 54,807 00 7 T 3 o curr. 5 curr. 76, 77. March 1, 1879. At pleasure. 14 685517 00 6 curr At pleasure 15 16 Chesapeake and Ohio Canal stock.... Water stock 48,800 00 96,560 00 6 curr. 6 curr. At pleasure. At pleasure. 17 18 Ten years bonds, or Bowen bonds... Three years certificates, or Emery bonds 351,400 00 6 850 00 6 curr. 7T- 3 ?T curr January 1, 1879. Matured 19 Five years certificates, or Emery bonds . 192450 00 73 curr November 20 1875. 20 CITY OF GEORGETOWN. Six per cent, general stock 182.885 00 6 curr. At pleasure. 21 22 Eight per cent, general stock Six per cent, bounty stock 20,000 00 20,000 00 8 curr. 6 curr. July 1, 1881. September 24, 1884. 23 Six per cent, market stock. 30,804 21 6 curr. At pleasure. 24 CERTIFICATES PAYABLE OUT OF SPE CIAL ASSESSMENT ON PROPERTY BENEFITED. General improvement certificates, commonly called "greenbacks," about $17,994,673 21 1 450 000 00 8 curr. July 1, 1874, 75, ?5 Water certificates 166 000 00 8 curr. 76, 77, 78. July 1, 1877. 26 Sewer certificates, about 1 100 000 00 8 curr. July 1, 1874, 75, 76, 77, 78. 176 DEBTS OF THE DISTRICT OF COLUMBIA. 1. PERMANENT IMPROVEMENT BONDS, (SIXES.) This loan of four million dollars was authorized by acts of the Legislature, July 10, 1871, and December 16, 1871. The bonds bear date December 20, 1871, are in denominations of $50, $100, $500, $1,000, and are payable to J. & W. Seligman & Co, or bearer, on the first day of July, 1891, with six per cent, interest, payable semi- annually in gold on the first days of January and July in each year at the First National Bank of New York, with coupons attached. The act of the Legislature of July 10, 1871, under which these bonds were issued, was approved, ratified, and confirmed by Con gress by act of May 8, 1872. The loan was negotiated in Europe and most of the bonds are still held abroad. 2 and 3. PERMANENT IMPROVEMENT BONDS, (SEVENS,) COMMONLY CALLED EIGH TEEN YEARS BONDS. These bonds were issued under the acts of the Legislature of thp District, June 23 and June 25, 1873. They bear date July 1, 1873, are in denominations of $50, $100, $500, and $1,000, and are payable to J. & W. Seligman & Co., or bearer, on the first day of July, 1891, with seven per cent, interest, payable semi-annually in currency on the first day of January and July in each year at the First National Bank of New York, with coupons attached. 4. WATER STOCK BONDS or 1871. Issued under authority of an act of the District Legislature, July 20, 1871, " in order to provide means to defray the expenses of com plying with the injunctions of the fourth and fifth sections of the act of Congress of July 14, 1870." The bonds are all coupon bonds of $1,000 each, bear date October 1, 1871, are payable to bearer on the first day of October, 1901, with interest at the rate of seven per cent, per annum in current money of the United States, on the first days of January and July in each year at the First National Bank of New York. DEBTS OF THE DISTRICT OF COLUMBIA. 177 : 5. WATER STOCK BONDS OF 1873. These bonds, issued only to the amount of thirty-five thousand dollars under the act of the District Legislature, June 26, 1873, are payable in currency, and are in all respects like the Water Stock Bonds of 1871, previously described, (4,) except that they become payable on the first day of July, 1903. The interest is at the rate of seven per cent, per annum, payable also in currency semi-annually, on same days and at same place as the Water Stock Bonds of 1871. (No. 4.) 6. MARKET STOCK BONDS. Issued under acts of the District, August 23, 1871, and June 19, 1872. The bonds are of denominations of $50, 100, $500, and {jJljOOO^with coupons attached; are made payable to bearer on the 26th of July, 1892, with interest at the rate of seven per cent, per v.inum in current money of the United States at some convenient )lace in the city of Washington. They bear date July 26, 1872. 7. CHICAGO RELIEF BONDS. Authorized by act of District Legislature, October 8, 1872. They Dear date of January 1, 1873, are all coupon bonds of $1,000 each, and are payable to bearer in five years from date, (January 1, 1877,) with interest at seven "per cent, per annum in currency, payable semi- aunually. The amount issued and still outstanding is one hundred thousand dollars. 8. GUARANTEED BONDS. These bonds are issued or to be issued by the sinking fund com missioners under an act of Congress, June 20, 1874, for the purpose of 12 17& DEBTS OF THE DISTRICT OF COLUMBIA. funding the floating debts of the District, including the sewer certifi cates, sewer taxes paid, certificates of the Auditor of Board of Public Works, certificates of the Auditor and Comptroller of the District, unliquidated claims, and claims for private property taken, and for damage to property sustained by reason of public improvement and repairs. These claims are to be determined by an auditing board, composed of the First and Second Comptroller of the Treasury, and the amount cannot be ascertained until their report is made. It is estimated that the amount will not be far from eight million dollars. The bonds are to be in denominations of $50 and 500, to bear date August 1, 1874, and made payable in fifty years from date with interest at the rate of three and sixty-five one hundredths per cent, per annum, payable semi-annually. The interest is payable in cur rency. The bonds are by said act of Congress exempt from taxation by Federal, State, or municipal authority. And the faith of the United States is pledged that the United States will, by proper pro portion of appropriations, and by causing to be levied upon the prop erty within the District such taxes as will provide the resources necessary to pay the interest on said bonds as the same may become due and payable, and create a sinking fund for the payment of the principal thereof at maturity. They are called guaranteed bonds, because the faith of the United States is pledged for their payment. 9. FUNDING LOAN BONDS, (ACT OF CONGRESS.) These bonds are issued by the Sinking Fund Commissioners under the acts of Congress, June 1, 1871, and May 8, 1872, for the purpose of funding certain liabilities of the city of Washington, the govern ment of which was abolished upon the establishment of the govern ment of the District. The bonds are in denominations of 50, 100, 500, and 1,000, bear date July 1, 1872, and are payable to J. & W. Seligman & Co., or bearer, on the first day of July, 1892, with six per cent, interest, payable semi-annually in gold on the first days of January and July in each year at the First National Bank of the city of New York, with coupons attached. They contain the obli- DEBTS OF THE DISTRICT OF COLUMBIA. 179 gallon of the District of Columbia "for and in behalf of the city of Washington," for the payment of both principal and interest. 10. FUNDING LOAN BONDS, (ACT OF LEGISLATURE.) These bonds are issued for the same purpose as those described above, (9,) to fund certain liabilities of the city of Washington, under an act of the District Legislature, June 20, 1872, which has been rati fied and confirmed by act of Congress, June 20, 1874. They contain the obligation of the District, for and in behalf of the city of Washing ton, for the payment of the same, principal and interest. The bonds are in denominations of $50, $100, $500, and 1,000, bearing date November 1, 1872, and are payable to bearer in thirty years from date, (November 1, 1902,) with six per cent, interest thereon in coin, semi-aunually, on the first days of May and Novem ber in each year. Coupons attached. The act of Congress ratifying the issue of these bonds provides that none of them unsold shall be negotiated at less than par. 11 COUNTY SCHOOL BONDS. Issued under an act of the District Legislature, June 26, 1873. The bonds express the obligation of the District for and on behalf of the county of Washington, are payable to bearer on the first day of July, in different years, 1874, 1875, 1876, 1877, with seven per cent, interest, payable semi-annually, on the first days of January and July, in each year, at the National Metropolitan Bank, in the city of Wash ington. Coupons attached. 12. GEORGETOWN STEAM FORCE PUMP BONDS. Issued under act of District Legislature, June 26, 1873. These bonds contains the obligation of the District for and in behalf of 180 DEBTS OF THE DISTRICT OF COLUMBIA. Georgetown, are payable to bearer on the first day of March, 1879, with seven and three-tenths per cent, interest, payable semi-annually on the first days of January and July, in each year, at the National Metropolitan Bank, in the city of Washington. They are each of the denomination of $500, and have semi-annual coupons attached. The interest is paid in currency. 13. CITY OP WASHINGTON FIVE PER CENT STOCK. Issued by the Mayor, Board of Aldermen, and Board of Common Council of the city of Washington, under act of City Council, Au gust 10, 1828. This is in certificates, acknowledging the indebted ness of the city to persons named therein, or assigns, in any sums not less than ten dollars, as the holders desire to have their stock divided, bearing interest at the rate of five per cent, per annum, payable quarter-yearly. The interest is paid in currency on the first days of January, April, July, and October, in each year. The certificates are transferable only on the books of the District Comptroller in such amounts not less than ten dollars as the holders may desire. This stock is redeemable at the pleasure of the Corporation, now the District, after ten years (now expired) from its issue, and by act of the City Council of March 10, 1842, is convertible into six per cent. stock, at the rate of one hundred dollars for eighty-three and one- third dollars of the six per cent, stock, described hereinafter under J^o. 14. 14. WASHINGTON Six PER CENT. STOCK. Issued by the Mayor, Board of Aldermen, and Board of Common Council of the city of Washington, under an act of City Council, October 25, 1843. This stock is in certificates acknowledging the indebtedness of the city to persons named therein, or assigns, in any sums the hold- DEBTS OF THE DISTRICT OF COLUMBIA. 181 era may desire to have their stock divided, bearing interest at six per cent, per annum, payable quarter-yearly. The interest is paid in currency on the first days of January, April, July, and October in each year. The certificates are transferable only on the books of the District Comptroller, in such amounts as the holders desire. ^Redeemable at the pleasure of the corporation, now the District of Columbia. 15. CHESAPEAKE AND OHIO CANAL STOCK. Issued by the Mayor, Board of Aldermen, and Board of Common Council of the city of Washington, under act of the Council, July 14, 1847, in aid of the Chesapeake and Ohio canal. This stock is in certificates acknowledging the indebtedness of the city to persons named therein, or assigns, in any sums the hold ers may desire to have their stock divided, bearing interest at six per cent, per annum, payable half-yearly. The interest is paid in currency on the first days of January and July in each year. The certificates are transferable only on the books of the District Register, in such amounts as the holders desire. Redeemable at the pleasure of the corporation, now the District of Columbia. The city owned and held, and .the District now holds, coupon bonds of the Chesapeake and Ohio Canal Company to an amount greater than the whole amount of this stock, and those bonds are in the hands of the Sinking Fund Commissioners, who collect the in terest thereon. 16. WASHINGTON WATER STOCK. Issued by the Mayor, Board of Aldermen, and Board of Common Council of the city of Washington, under act of the City Council, June 2, 1859. This stock is in certificates acknowledging the indebtedness of 182 DEBTS OF THE DISTKICT OF COLUMBIA. the city to persons named therein, or assigns, in any sum the hold ers may desire to have their stock divided, bearing interest at six per cent, per annum, payable quarter-yearly. The interest is paid in currency in January, April, July, and Octo ber in each year. The certificates are transferable only on the books of the District Comptroller, in such amounts as the holders desire. Redeemable or payable at the pleasure of the corporation of Washington within a period of ten years [now expired] "from the date of the issue thereof." 17. TEN YEARS BONDS, COMMONLY CALLED " BOWEN BONDS." Issued by the city of Washington, under act of Congress of July 27, 1868, and an ordinance of the city of Washington. The bonds are in denominations of $50, $100, $500, and $1,000, and certify that the city of Washington is indebted to the bearer in the sum named, redeemable in ten years from January 1, 1869, with six per cent, interest, payable semi-annually, on the surrender of the matured coupons; the principal and interest payable in lawful money of the United States. The interest is payable on the first days of January and July in each year. They are more commonly called "Bowen bonds," as they were issued while Hon. 8. J. Bowen was mayor of the city. The bonds have on the back a printed indorsement that they are payable January, 1880, which is an error. They are payable Janu ary, 1879. 18. THREE YEARS CERTIFICATES, OR "EMERY BONDS." Issued in accordance with an act of Congress of July 7, 1870. They bear date July 30, 1870, and certify that the corporation of Washington is indebted unto the bearer in the sum of fifty dollars, payable in three years after date, with 7, 3 per cent, interest, paya ble semi-annually in lawful money, with semi-annual coupons at- DEBTS OF THE DISTRICT OF COLUMBIA. 183 tached, which become payable January 30 and July 30 in each year. All of the denomination of $50. They are commonly called " Emery three-years bonds," because issued while Hon. M. G. Emery was mayor of the city. 19. FIVE YEARS CERTIFICATES, OR "EMERY BONDS." Issued in accordance with an act of Congress, July 15, 1870. They bear date Nov. 20, 1870, each of the denomination of $50, and certify that the corporation of Washington is indebted unto the bearer in the sum of fifty dollars, payable five years after date with 7, 3 per cent, interest, payable semi-annually in lawful money. Coupons attached payable May 20 and Nov. 20 in each year. Principal becomes payable Nov. 20, 1875. Commonly called "Emery five years bonds," because issued while Hon. M. G. Emery was mayor of the City. 20. GEORGETOWN Six PER CENT. GENERAL STOCK. Issued by the corporation of Georgetown, under an act of the City Council. The stock is in certificates acknowledging the indebtedness of the corporation to the persons named therein, or assigns, in any sums the holders may desire to have their stock divided, bearing six per cent, interest per annum, payable quarter-yearly. The interest is payable in currency on the first days of January, April, July, and October in each year. The certificates are u transferable only by appearance in person, or by attorney, at the office of the Register (now Comptroller) of the District of Columbia, where the debt is recorded." No time is specified for the payment of the principal, and it is re garded as payable at the pleasure of the corporation, now by the District of Columbia. 184 DEBTS OF THE DISTRICT OF COLUMBIA. 21. GEORGETOWN EIGHT PER CENT. GENERAL STOCK. Issued by the corporation of Georgetown, under an act of the City Council. The stock is in certificates acknowledging the indebtedness of the corporation to the persons named therein, or assigns, in any sums the holders may desire to have their stock divided, payable on the first day of July, 1881, bearing interest at eight per cent, per annum, payable quarter-yearly, on the first days each of January, April, July s and October. The interest is paid in currency. " Transferable only by appearance in person, or by attorney, at the office of the Register (now Comptroller) of the District of Colum bia, where the debt is recorded." 22. GEORGETOWN Six PER CENT BOUNTY STOCK. Issued by the corporation of Georgetown, under an ordinance of the City Council, Sept. 24, 1864. The stock is in certificates acknowledging the indebtedness of the corporation to the person named therein, or assigns, in any sums the holders desire to have their stock divided, redeemable after five years from the date of the act, at the pleasure of the corporation, and pa}?able in twenty years, (Sept. 24, 1884,) bearing interest at the rate of six per cent, per annum, payable quarter-yearly. The interest is paid in currency. " Transfer able at the office of the clerk of said corporation," (now the District Comptroller,) "by the holders thereof, in person or by attorney." 23. GEORGETOWN Six PER CENT. MARKET STOCK. Issued by the corporation of Georgetown, under an act of the City Council, January 9, 1864. DEBTS OF THE DISTRICT OF COLUMBIA. 185 The stock is in certificates, acknowledging the indebtedness of the corporation to the persons therein named, or assigns, in any sums the holders desire to have their stock divided, with interest at the rate of six per cent, per annum, payable quarter-yearly. The interest is paid in currency on the first days of January, April, July, and October in each year. The principal is payable at the pleasure of the corporation, now by the District of Columbia. "Transferable only by appearance in person, or by attorney, at the office of the Register (now Comptroller) of the District of Colum bia, where the debt is recorded." 24. GENERAL IMPROVEMENT CERTIFICATES, COMMONLY CALLED " GREEN BACKS." These certificates bear date July 1, 1873, and are payable in one, two, three, four, and five years. They certify that for work done under direction of the Board of Public Works, and chargeable to the private property adjoining and benefited thereby, there is due to the bearer fifty dollars, payable July 1, 1874, (or 75, 76, 77, or 78,) with eight per centum interest, payable semi-annually, as per coupons attached. " Issued in accordance with act of Legislative Assembly, secured by pledge to the Commissioners of the Sinking Fund of assessments made in accordance with act of Congress against private property benefited by improvements, and receivable in pay ment of such assessments." They are receivable for taxes for improvements on property bene fited thereby; but for the portion of such taxes which are payable in any year only the certificates maturing that year are received. 25. WATER CERTIFICATES. These certificates bear date July 1, 1873, and certify that there is due the bearer, four years from date, in denominations of $50, $100, and 500, with eight per cent, interest, payable at Washington, D. C., 186 DEBTS OF THE DISTRICT OF COLUMBIA. on the first days of January and July of each year in current money of the United States. " This certificate is based on assessments for laying water-mains in the city of "Washington to the amount of 166,678 37, and is issued agreeably to an act of the Legislative Assembly of the District of Columbia, entitled An act authorizing the Commissioners of the Sinking Fund to issue certificates to pay for laying water-mains, and providing for the assessment of water- mains and fire-plugs, approved June 23, 1873, which makes the cer tificates liens on the property assessed for laying water-mains." 26. SEWER CERTIFICATES. Issued under act of District Legislature of June 26, 1873. The certificates, in denominations of $50, $100, and $500, certify for work done under direction of the Board of Public Works, and chargeable to the private property adjoining and benefited thereby, there" is due to the bearer the sum named, payable July 1, (different years, 1874, 75, 76, 77, and 78,) with eight per cent, interest, pay able semi-annually, as per coupons attached. Interest payable in currency. By the act of Congress, June 20, 1874, the tax by which these certificates were secured was abated, and the Sinking Fund Commis sioners were authorized to issue the new guaranteed bonds, bearing interest at 3-j 6 ^, (see No. 8,) to holders of these certificates in lieu thereof. No other provision is made for their redemption. In estimating the amount of the 3 T 6 /Q- guaranteed bonds, as set down in the table at the head of this chapter, eight million dollars, the whole amount of these bonds, is included. INDEX. NOTE. Everything relating to national banking associations is indexed alphabetically under the head of " NATIONAL BANKS." PAGE, A. ACT TO STRENGTHEN THE PUBLIC CREDIT 81 ANTICIPATING payment of interest on coupon bonds and registered stock 71 APPROPRIATION for expenses of refunding loans, under the funding acts 9 APPORTIONMENT OF BANK NOTE CIRCULATION. (See National Banks.} 114, 153, 155 ASSIGNMENT of registered stock : By whom made, form, and execution of 57, 58 In foreign countries 57, 50 B. BALANCES OF OLD LOANS. (See Monthly Debt, Statement^ 25, 78, 79 BANKS AND BANKING ASSOCIATIONS: NATIONAL. (See National Banks.} 100-159 STATE, observations concerning; number formerly existing 99, 100 conversion of, into national banks 129, 145-147 tax on deposits and capital 142, 158, 159 on notes of, in circulation 145, 146 returns required from, as a basis of taxation 143 decisions relating to, cited 86, 126, 127, 129, 134, 145, 146 for savings, how taxed 86, 144, 159 BONDS: Amounts of outstanding 7, 25, 32 Called in for redemption 19, 20 Authority for calling in, for redemption 18, 76 Distinctive features of registered and coupon 55, 64 Registered, lost or destroyed, immediate notice of, should be given 60, 62 duplicates of, authority for, and how obtained 61, 62 interest on, where payable and how 69, 70 transfer of, by assignment 57, 59 Coupon, precautions to be observed concerning , 66 duplicates of, when issued, how obtained 66-68 exchange or conversion of 8, 68 interest on, where payable 70 transfer of, by delivery, before and after maturity 64 Payment of interest on, may be anticipated 71 187 188 INDEX. PAGB. BON D J Contin ued : Purchase of, oy Secretary of the Treasury 72, 82 method of proceeding and regulations concerning 73, 74 for the sinking fund 82, 83 Purchased for the sinking fund, are canceled and destroyed 83, 84 Payment and redemption of. , Y5-77 | Distinction between "redeemable" and "payable" 75 Principal of, where and how paid 76 and interest, obligation to pay in coin 79-82 Taxation of, by Federal and State authority 85-87, 126, 127 Deposit of, by national banking associations 110, 112, 110 BONDS, ETC., PAYABLE IN COIN: Schedule of 7 Funded loans 8-12 Consols, or 5- 20s of 1865, 1867, and 1868 12 Five-twenties of 1865 13 June, 1864 , 14 March, 1864, (all registered.} 15 1862 17-20 Ten-forties 15 Loan of 1863, or sixes of 1881 16 July and August, 1861, or sixes of 1881 20 February, 1861, or sixes of 1881 22 1858, or fives of 1874 23 Oregon war debt 21 Balances of old loans 25, 79 Gold certificates 20 United States notes ... 35-43 Old demand notes .- , 43 BONDS, ETC., PAYABLE IN CURRENCY: (See Certificates, Debt of the United States, Na*uy Pension Fund, Pacific Railway Bonds, Fractional Currency?) CALLING IN BONDS FOR REDEMPTION: Other than those of funded loan, order of 18, 76 Of the funded loans, order of 9, 77 CANCELLATION: Of five-twenty bonds 18, 76, 111 Of early series of gold notes 27 Of three per cent, certificates 29 Of notes exchanged for legal tenders 37, 38 Of legal tenders under act of April 12, 1866 39 issued prior to 1869 43, 50 Of old demand notes 44 Of defaced notes and fractional currency 49, 50 Of fragmentary notes 50, 51 Of bonds purchased for sinking fund 83, 84 deposited by national banks Ill, 132, 133 INDEX. 189 PAGE. CAVEAT: Form of, to be filed on loss of registered stock 62 Effect of, when coupon bonds are lost 66 CERTIFICATES: Of organization of banks. (See National Banks.} 103, 111 Gold certificates ; limitation and uses of, etc ... 26, 27 Certificates of deposit of U. S. notes, do 27, 28 Three per cent, or temporary loan certificates 28, 153 payable in lawful money 28 process of redemption of, do 29 Issued to E. and N. A. Railway Co. of Maine, known as certificates of indebted ness of 1870 30 payable in lawful money.... 31 Of stock, or registered bonds 55-57 CLOSING TRANSFER BOOKS of registered stock, dates of 56, 57 effect of on payment of, interest 57 COIN: Reserve in Treasury; general objects of 72, 82 To be used in redeeming five-twenty bonds 76 purchasing bonds for the sinking fund 82, 83 What bonds are payable in 79-82 Sale of, (See Sales of Gold.} -. 72-75 COMPTROLLER OF THE CURRENCY. (See National Banks.} 101, 102 CONSOLS: Origin of the term; description of bonds; when payable, etc 12,13 Otherwise known as five-twenties of 1865, of 1867, and of 1868 12, ]3 COUPONS: May be detached and pass by delivery; decisions of courts respecting 65 Where collectable; advance payments of 70, 71 Of bonds called in for redemption fractional payments 76, 77 COUPON BONDS: Pass by delivery; decisions of courts respecting title 64, 65 Precautions to be observed by holders; advantages gained thereby in case of loss... 66 Duplicates of, when defaced or destroyed 66, 67 when mutilated or indorsed 68 regulations for obtaining 61-64 no provision for, in case of loss 67 Conversion of, into registered stock 68, 11] CONSTITUTIONALITY : Of the legal-tender acts 41 Of the law taxing notes of State banks, &c 145 CURRENCY, the introduction of, &c 44-47, 99 (See United States Notes, Fractional Currency, National Banks.} CURRENCY BUREAU, act establishing. (See National Banks} 101 CURRENCY SIXES. (See Pacific Railway Bonds} 31 D. DEBT OF THE UNITED STATES: Bearing interest and payable in coin. (See Bonds, etc., Payable in t/oin.) 7-24, 79-82 190 INDEX. PAOB. DEBT OF THE UNITED STATES Continued- Bearing interest and payable in lawful money, VIB : Three per cent, or temporary loan certificates 28 Navy pension fund 29 Certificates of indebtedness of 1870 30 Pacific railway bonds 31 Bearing no interest and payable in coin, viz : Balances of loans contracted prior to February 25, 1862 25, 79 Gold certificates 26 United States notes 35 Old demand notes 43 Bearing no interest, and payable in lawful money, viz: Certificates of deposit 27 Fractional currency 44 Highest point reached in , 92 Reduction of, up to September 1, 1872 93 Not to be increased by virtue of any existing law 9 General statement of loans from the earliest period 93-96 Monthly statement of 77, 78 DEFACED OR DESTROYED BONDS: Duplicates may be obtained in lieu of - 60-63, 66-68 except of classes called in for redemption 67 DEFACED AND MUTILATED CURRENCY 49-54 (See United States Notes, Fractional Currency.) DISTINCTIVE PAPER: Exclusively used for bonds and other obligations of the United States 4S Peculiarities of; circular respecting 48 Unauthorized possession of, a penal offense; penalties incurred 48 E. EXTINGUISHMENT OF THE PUBLIC DEBT: By operation of the sinking fund 82-85, 93 An established feature of national policy 88 Extracts from messages of Presidents recommending the 88-91 In 1835, celebration on account of. 91 Distribution of surplus revenue after, in 1837 92 Rates of premium paid for purposes of. 92 F. FOUR PER CENT. BONDS. (See Funded Loans.) 9, 11 FOUR-AND-A-HALF PER CENT. BONDS. (See Funded Loans.) 9, 10 FIVE PER CENT. BONDS: Of 1874, description of the loan 23 oldest outstanding loan not called in for redemption 24 Of 1881. (See Funded Loans.) 10 Of 1904. (See Ten-forties.) 15, 16 FIVE-TWENTY BONDS: Of 1865, description of. 13, 14 Of 1865, 1867, and 1868, or Consols.... 12, 13 INDEX. 191 PA OB. FIV E-TWENTY BONDS Continued: Of Juno, 1864, description of 1-1 Of March, 1864, description of 15 Of 1862, description of. 17 origin of the loan ; description of series 17, 18 list of, called in for redemption 19, 20 FRACTIONAL CURRENCY: rigin and necessity of 44 Acts of Congress authorizing 45, 46 First issued as "postage currency." 46 General description and characteristics of. 47 Limited to fifty millions 47 Amount required for circulation 47 Mutilated or defaced, regulations for redemption of 49-52 Old, defaced and mutilated, may be exchanged for new 53 FUNDED LOANS: Acts of authorization 8-10 Description of loans and bonds 10-12 Bonds of, wholly exempt from taxation : 9, 11, 87 principal and interest payable in coin 8, 11, 82 may be either registered or coupon 8 how exchanged for 5-20 s 9 how called in for payment 9, 77 amount which may be issued, viz: $500,000,000 five per cents of 1881 8,10 $300,000,000 four-and-a-half per cents of 1886 9 $1,000,000,000 four per cents of 1901 9 but not exceeding, in all, $1,500,000,000 10 interest on, payable quarterly 10, 11 Interest on registered bonds, paid by check 69 Expenses of negotiating, &c., appropriation for 9 Only loansnow offered by the Government 11 Faith of the United States pledged by act of Congress to payment of, in coin 82 G. GOLD. (See Coin, Sales of Gold.} 72, 76, 82, 83 GOLD BANKS AND GOLD NOTES. (See National Banks.) 154 GOLD CERTIFICATES. (See Certificates.) 26 GOVERNMENT: Its necessities and powers, observations concerning 99 Duty of, to redeem its obligations in coin, unless otherwise expressly provided in the contract 40, 79, 81 Faith of the United States solemnly pledged to such redemption 81 GREENBACKS: Origin of the term. (See United States Notes.) 35 H. HOLDERS OF GOVERNMENT SECURITIES: l)ila ,.ory in claiming payment 25 Precautions to be observed by. 60, 66 192 INDEX. PAQB HOLDERS OF GOVERNMENT SECURITIES Continued: To select place for payment of interest on registered stock 69 Should notify Register of change in address 70 I. INTEREST: When payable in coin 79-82 When itceasestorun 9, 25, 74, 75, 76, 78, 154 On registered bonds, where payable , 69 transferred after books are closed, to whom payable 57, 69 of funded loans, paid by check sent to address of holders 69 of all other loans, payable at designated offices 69 general rules concerning 69, 70 disposition of, when not claimed in ninety days 70 On coupon bonds, how and where collectable 70, 71 in cases of called bonds or detached coupons 76, 77 May be paid before maturity; when subject to rebate 71 On funded loans, exempt from taxation 87 Collectioivof, on bonds deposited with Treasurer by national banks 117 L. LEGAL-TENDER NOTES: (See United States Notes.) Origin of the term; for what receivable 35 For what they are not receivable 42 Constitutionality of the laws relating to 41 Dates and descriptions of issues 42, 43 LIABILITY: (See National Banks.} Of stockholders in national banks; extent and enforcement of 108, 134 banking associations ; limitations and restrictions affecting 123 directors and other officers in their individual capacity 136, 152 executors, trustees, &c 142 LIMITATION: No statute of, against matured bonds 25 LOANS: Outstanding, not matured, payable in coin 7 matured, but not presented for payment 25 Not bearing interest. (See Debt of the United States.) 25 List of, from 1776 to 1872 93-96 LOST BONDS: If registered, notice of loss to be given Treasury Department 60, 66 may be duplicated 61 Proceedings for obtaining duplicates 62, 63 Coupon bonds renewed only when destroyed or defaced 66, 67 How such renewals are obtained , 63, 68 M. MONTHLY DEBT STATEMENT: Description of. 77, 78 Balances cf old loans included in 78 MUTILATED CURRENCY. (See United States Notes ; Fractional Currency.) 49 INDEX. 193 PAGE. N. NATIONAL BANKS: ACTS OF AUTHORIZATION 101-142 amendatory of the banking laws 142-159 ANNUAL REPORT OF COMPTROLLER; what to contain 140 APPOINTMENT OF OFFICERS. (See Election. Officers.} 105 ARTICLES OF ASSOCIATION. (See Organization) 103 ASSIGNMENT of depositor s claim, after failure of bank and before appointment of receiver, not good as a set-off in favor of a debtor of the bank 134 BAD DEBTS defined; to be deducted from net profits before dividend 124 BANKS organized as national, cannot be converted into State banks 129 designated as depositaries, under banking laws, are public depositaries 130 BANKING ASSOCIATIONS, how formed. (See Organization.) ]03, 104 no limit to number of, or to aggregate amount of capital 103 beyond minimum amount, to capital of each bank 103 must deposit bonds whether circulation is obtained or not 103 sufficiency of proof concerning formation of, a question for Comptrol ler 104, 109 BANK NOTE PAPER. (See Counterfeiting.) 140 BANK RESERVES. (See Redemption Agencies. Reserves...) 120 BANK SHARES may be constitutionally taxed by State authority; rate must not exceed that imposed on State banks 126, 127 but may equal the highest rate imposed, when a lower rate exists as to banks specially exempted 127 BILLS OF EXCHANGE, discount of, when not usurious 120 BONDS, registered only, may be deposited to secure circulation 103, 111 may be issued in lieu of coupon for purposes of deposit Ill deposited, amount necessary to perfect organization 110, 111 always to equal one-third of capital stock actually paid in Ill when to be increased Ill not to be diminished below requirements of act 118 when excess may be taken up Ill to be transferred to Treasurer in trust 112 transfers of, by Treasurer, to be countersigned and recorded by Comptroller 113 to be examined annually and compared with Comptroller s books, &c., by officers or agents of banks 116, 117 result of examination to be certified to Treasurer by such officers or agents 117 to be held exclusively as security for redemption of notes ; de preciation in, to be made good 117 may be exchanged for other United States bonds 117 returned on surrender and cancellation of circulating notes US or on deposit of lawful money 128. 157 cannot be retained as security for other claims of the United States 128 ; sale of, by Comptroller, for purposes of redemption 133 p interest on, to be collected by the banks 117 194 INDEX. PAGE. NATIONAL BANKS Co?itinued: BUSINESS OF BANKING, -when it may be commenced 112 where to be transacted 106 certificate authorizing such commencement to be published 112 when it may be withheld by Comptroller 109 BY-LAWS to be established by board of directors , 106 may, subject to the provisions of the act, regulate the transfer of stock, election of directors, etc : 106 CAPITAL STOCK, no limit to amount of 103 amount of, required on organization 104 to be divided into shares of $100 108 fifty per cent, to bo paid in before commencing business 109 remainder, how and when to be paid 110 to be deemed personal property 108 mode of transfer to be fixed by articles or by-laws 106, 108 increase of, provisions relating to 109 reduction of, how effected; limitation of 109 withdrawal of, while bank is in operation, forbidden 124 of delinquent shareholders, when and how to be sold 110 not realizing amount due and expenses, forfeited 110 if not sold within six months, to be canceled 110 and any deficiency in capital caused thereby to bo made good in thirty days, or association to be wound up 110 regulations for payment of duty on 162, 163 CASHIER, to be appointed by board of directors 105 bank responsible for his acts 105 limitations of responsibility, when not effectual 105 when his authority may bo inferred 105 to give security, if required by association 105 may certify payment of installments of capital 110 verify final statement of organization 112 sign memorandum on bonds transferred to Treasurer 112 to keep list of stockholders 125 may verify reports, returns, &c 117, 126, 128, 150, 151 may waive protest 131 CERTIFYING CHECKS, unlawful, unless amount certified is actually on deposit 151 the act of, by competent officers, creates a valid obligation on part of bank 151 contrary to law, subjects banks to proceedings for closing up, under section 50, act of 1864 151 CHARLESTON, when to be added to list of cities where banks may hold three -fifths of lawful money reserve of associations located elsewhere 121 CIRCUIT COURTS OF UNITED STATES, have no jurisdiction in equity to restrain Treasurer or Comptroller in disposing of bonds on deposit 139 CIRCULATION, how proportioned; original limit of total issue $300,000,000 114 increase of $54,000,000 authorized; how distributed 29, 114,152 of currency banks, limited to $500,000 each 153 of gold banks, limited to $1,000,000 each 153 INDEX. 195 PAGE. NATIONAL BANKS Continued: CIRCULATION Continued: $25,000,000 of, redistribution of, in States having less than their proportion; provisions concerning. (See Comptroller.}.. 114,155,150 CIRCULATING NOTES, how provided ; denominations and form of 115 plates and dies to remain in charge of Comptroller 125 when to be furnished for use 113 not more than one-sixth to be under $5 115 none under $5, after resumption of specie payments 115 must be signed by president or vice president and by cashier.. 115 and payable on demand at place ofbusinesas 115 when banks may issue; for what they are receivable 115, 110 none other than those specified to be issued by banks 116 or furnished by government officers, under penalty of fine and imprisonment 118 worn-out or mutilated, to be replaced 116 redemption of, how secured. (See Reserves.) 113, 114 provisions relating to, 53, 121, 122, 128, 132, 135, 156, 157 of banks in liquidation, redeemed by treasurer 53, 128 of banks in ALBANY, BALTIMORE, BOSTON, CHICAGO, CINCIN NATI, CLEVELAND, DETROIT, LOUISVILLE, MILWAUKEE, NEW ORLEANS, NEW YORK, PHILADELPHIA, PITTSBUGH, SAINT Louis, SAN FRANCISCO, and WASHINGTON CITY, to be re deemed at NEW YORK 121, 122 of banks in other places, to be redeemed at a bank in either of the cities named. (See Redemption Agencies) 122 of each bank to be received at par by every other bank 122 not to be hypothecated or used to increase capital stock 124 withholding of, from use, when a misdemeanor 149 amount of, issued under act of July 12, 1870, to be reported monthly by Comptroller 153 COMPTROLLER OF THE CURRENCY -. How appointed ; tenure of office; salary 101 Oath of office; bond 101, 102 Not to be interested in national banks 102 Duties and Functions of: To file and preserve articles of association 103 record and preserve certificates of organization 104 certify documents to be used as evidence 102, 104 authorize associations, when duly organized, to commence busi ness 105, 112, 130 examine and determine when associations are entitled to such author ization 112 issue his official certificate for that purpose; contents of 112 record and countersign transfers of bonds belonging to associations 1 13 advise the parties concerned by mail 11- ! deliver to associations which have complied with the law their quota of circulating notes 114 furnish gold notes to associations organized as gold banks . 154 196 INDEX. PAG*. NATIONAL BANKS Continued: COMPTEOLLEE OF THE CUEEENCY Continued: Duties and Functions of: To supervise the engraving of plates and dies 115, 12? replace worn-out, mutilated, and lost notes 116 make regulations for the entry or record of such notes 116 authorize associations to receive interest on bonds 117 require associations to make up deficiency in case of depreciation in market value of bonds deposited 117 and to make good any deficiency in lawful money reserve 121 in case of default, to proceed to close up the association 121 take like proceedings in case of failure to select a redemption agency, or to redeem circulating notes thereat 122 suspend, after a preliminary examination, banks failing to redeem either at their own counters or at redemption agencies 131 appoint a special agent to make an immediate further examina tion 132 in case of insolvency, and within thirty days after notice of failure, to declare bonds and securities in pledge forfeited 132 and thereupon to notify holders of circulating notes to present the same at the Treasury for payment cancel or sell forfeited bonds 132, and appoint a receiver 133 advertise for claims against the association 135 and from time to time, after providing for any deficiency in redeeming circulation, make ratable dividend of proceeds realized by receiver from assets of association .. 135 institute suit, in his own name, for forfeiture of banking privileges, &c., in case of wilful violation of banking laws by directors 136, 137 institute proceedings for winding up, in case of improper certification of checks 151 appoint from time to time, with approval of Secretary, examiners of banks 137 make an annual report to Congress ; contents of. 140, 141 report to Secretary, monthly, amount of circulating notes issued under the act of July 12, 1870, authorizing increase 153 take steps for redistribution of circulating notes under same act 156 give preference in certain cases in such distribution 153 make requisition on banks having a surplus circulation for a pro rata return thereof , 156 in case of non-compliance, to sell bonds of defaulting association to an e qu al amount, 156 make regulations, subject to approval of Secretary, for removal of banking associations from one State to another in certain cases 157 sell bonds of any bank going into voluntary liquidation and omit ting to secure, with n six months, the redemption of its notes 157 And after providing for such redemption, with expenses of sale, to pay over balance of proeeec s, if any, to such bank or its legal rcpresenta- *ive8... . 158 INDEX. 197 PA<JB NATIONAL BANKS Continued: COMPTROLLER OF THE CURRENCY Continued: Discretionary powers of: To withhold certificate of authorization in certain cases 104, 10 determine maximum increase of capital 109 reduction of capital 109 permit exchange of bonds deposited 117 approve of redemption agencies 122 cancel oonds of insolvent associations 132 or dispose of the same at public auction or private sale 133 and accept in payment the circulating notes secured thereby... 133 call for special reports from banking associations - 150 CONFLICT OF OPINION, in decisions of State courts relative to taxation of national banks 12.7 CONVERSION OF STATE BANKS. (See State banks.} 129 CORPORATE EXISTENCE, dates from execution of preliminary certificate of organiza tion 105 duration of; powers incident to 105 COUNTERFEITING, uttering false notes, engraving, possessing, or using false plate,?, possessing paper adapted to such use felonious, and punishable by fine and imprisonment 140 CURRENCY BUREAU, establishment and functions of 101 where to be located 102 DEBTS DUE FROM STOCKHOLDERS, banks have no lien on shares for, unless expressly authorized by articles of association 106 DEBTS owing to banks and collectable by receiver, the term defined 134 DEPOSITARIES OF PUBLIC MONEY, banks to act as, when designated by Secretary of the Treasury, and on giving satisfactory security 130 to receive at par all national bank notes paid to the Government 131 DEPOSIT OF BANK FUNDS with bankers, constitutes a loan which cannot be secured by hopothecation of shares 123 DEPUTY COMPTROLLER, appointment, functions, and salary of 101 how qual ified 102 DIEECTORS, qualifications of, oath of office 106 may be appointed in first instance by association 105 provisions relating to their tenure of office 107 Board of, number requisite for k 106 vacancies in, may be temporarily filled by 107 may make by-laws, appoint and dismiss officers, and fill vacancies... 105-107 wilful violations of the banking laws, by or with knowledge and con sent of, to work a forfeiture of franchise 136 question of forfeiture in such case to be determined in a Uni ted States court ,. 137 personally and individually responsible for damages in such cases 137 (See Election. Officers.} DISTRICT ATTORNEYS, to conduct suits under banking laws 133 but private counsel may also be retained 135 DISTRICT COURTS OF UNITED STATES, may make order allowing receiver to compro mise doubtful claims in favor of bank... . 134 198 INDEX. PAGE. NATIONAL BANKS Continued. [IVIDENDS, may be declared semi-annually 122 none to be made while a deficiency in the lawful money reserve exists, 121 nor when losses equal or exceed profits 124 one-tenth of net profits for the six months next preceding, to be carried to surplus fund 123 capital not to be diminished in form of 121 not to exceed net profits on hand after deducting losses and bad debts, 124 ELECTION OF DIRECTORS, after those first chosen, to be annual 107 may be regulated in by-laws 106 omission of, at usual time, not to work a dissolution of association 107 how remedied 107 each share entitled to one vote at 10S shareholders may vote by proxy at; officers, etc., not to act as proxies... 108 delinquent shareholders debarred from voting at 108 ENGRAVING, to be done under supervision of Comptroller 115, 125 EXAMINATION, preliminary to authorization by Comptroller Ill objects of, and how made 112 and comparison of bonds deposited 116 to be made by banks or their agents annually 110 on completion of, result to be certified to Treasurer, 117 as to condition of banks, to be made from time to time. 137 EXAMINEES OF BANKS, appointment, duties, and compensation of 137 FIDUCIARIES, holding stock, not personally liable. (See Shares.} 142 FIRE-PROOF VAULTS, for preservation of plates, dies, etc 102 FORGERY, of notes, etc. (See Counterfeiting.) 139 GOLD BANKS 154, 155 circulation of, not to exceed $1,000,000 each 154 but no limit to aggregate circulation 103, 115 to be secured by deposit of United States bonds 154 not to exceed in amount eighty per cent, par value of bonds deposited 154 circulating notes of, not to be under five dollars 154 to be redeemable in gold coin 154 to keep reserve in coin equal to 25 per cent, of outstanding notes 154 to receive at par notes of all other solvent gold banks 155 subject to provisions of general banking law, with certain exceptions, 155 in San Francisco need not redeem at New York 122 need not receive currency notes at par 122 HOLDERS OF NOTES, when and how to be notified in case of voluntary liquidation 1 28 in case of compulsory liquidation. (See Liquidation.) 132 HOLDING OF SHARES AS SECURITY, when prohibited 123 HYPOTHECATION OF CIRCULATING NOTES forbidden 121 INDEBTEDNESS, never to exceed capital stock paid in 123 exceptions to the rule 123 INDIVIDUAL LIABILITY. (See Directors. Shareholders.) INSOLVENT OR FAILING BANKS, notes of, not to be paid out or put in circulation. (See Liquidation.) 124 INTEREST, rate of, on loans and discounts 11? INDEX. 199 PAOK. NATIONAL BARKS Continued: INTEREST Continued: when limited to seven per cent 119 in excess of legal rate, penalties for charging or taking 120 lawful, with current rate of exchange added, not excessive 120 INJUNCTION, to prevent liquidation, when and how obtainable by banks 135, 136 LIABILITY OF STOCKHOLDERS: (See Shares. Shareholders.} limit of, par value of shares, exclusive of amount in vested 108 for equitable contribution applies to all who can be reached by legal process 108 when enforced, action of Comptroller indispensable 134 LIST OF SHAREHOLPERS, to be kept by president and cashier 125 what to contain 125 to be subject to inspection 125 who may inspect, and when 125 copy of, to be transmitted annually to Comptroller 125 verified by oath of president or cashier 125 LIQUIDATION AND CLOSING OF BANKS 127-129 voluntary, by two-third vote of shareholders in interest 127 fact of, to be certified, under seal, to Comptroller 128 to be published, where and how 128 holders of notes and other creditors to be notified of 128 within six months from date of vote provision must be made for redemption of outstanding notes 128, 157 and liability of association on account of such notes terminated 128 otherwise bonds may be sold by Comptroller 158 redemption and disposition of notes by Treasurer. .. 128, 129 compulsory, when it may be enforced, viz: for deficiency in surplus required to be maintained by banks with capital of $5,000,000 or upwards 108, 109 failure to make good deficiency in capital stock 110 in lawful money reserve 121 select redemption agency 122 redeem circulation at par 122, 133 dispose of stock taken to secure debts 123 proceedings on failure to redeem 131-13^ notes to be protested unless protest is waived 131 or unless payment has been restrained by order of court. 131 notice of protest or waiver to be forwarded to Comptroller. 131 who is thereupon to appoint a receiver. (See Receiver.)... 133 investigation to be made forthwith by Comptroller; 132 special agent for, to be appointed and im mediate notice given to bank 132 pending which, bank may be suspended... 131 within thirty days from notice of failure, bonds on de posit may be forfeited 132 holders of notes to be thereupon notified 132 200 INDEX. PAOI. NATIONAL BANKS Continued LIQUID ATON AND CLOSING OF BAXKS Continued: notes to be thereupon redeemed by Treasurer 132 Secretary to regulate disposition of redeemed notes. 132 Comptroller to cancel bonds on deposit 132 or dispose of them at public or private sale 133 limitations and conditions relating to sale 133 United States to have prior lien on assets, after payment of costs and expenses 132, 133 proceedings on, may be stayed by injunction 135, 136 where injunction is to be obtained 139 LOANS AND DISCOUNTS, never to exceed one-tenth of capital stock paid in 110 on bonaf.de paper, under certain conditions, not included within the limit 119 rates of interest on, regulated. (See Interest.) 119 not to be made on security of stock of banks making loan 123 to be made in notes of solvent banks receivable at par 124 MEMORANDUM, on bonds transferred to Treasurer, may be signed by officer making the deposit 112 MISDEMEANORS. (See Officers.) 137 MUTILATION OF NOTES, &c., penalty incurredfor 139 MUTILATED AND WORN-OUT NOTES, may be exchanged for new 116 to be burned 116 NAME OF ASSOCIATION, to be stated in preliminary certificate 103 in case of State banks converted 129 subject to approval of Comptroller 103 OFFICERS, to be appointed and dismissed by board of directors 105 manner of appointment to be regulated by by-laws 108 and employe s not to act as proxies 1CS OFFICERS, EMPLOYES, OR AGENTS, when to be deemed guilty of misdemeanor... 137, 138 what acts of, forbidden, and how punished 13tf persons aiding or abetting, liable to same punishment as principals 151 to whom the prohibitions apply 152 ORGANIZATION, preliminary steps for 103, 104 Articles of association, what to contain 103 no change, impairing rights of creditors, to be made in 108 may provide for increase of capital 109 Not less than five persons competent to organize 103 Certificate of, what to contain 103, 101 to be acknowledged, authenticated, and transmitted to Comptroller, 104 certified copies of, when, where, and to what extent legal evidence.. 104 When to be deemed complete, and certified by Comptroller Ill, 112 When Comptroller s certificate may be withheld 104, 109 PAR VALUE OF SHARES, one hundred dollars 108 the measure of liability over and above amount invested.. 108 PERSONAL LIABILITY OF STOCKHOLDERS, when it is to be enforced action by Comp troller indispensable. (See Receiver.) 134 PLACE OF BUSINESS to be designated in preliminary certificate of organization 103 INDEX. 201 PAQR. NATIONAL BANKS Continued: PLATES AND DIES. (See Engraving. Circulating Notes. Counterfeiting.) 115,125 subject to control and direction of Comptroller 125 expense of, how provided for - 125 POST NOTES, issuing of, for circulation, prohibited 11H PRESIDENT to be selected from and appointed by board of directors 105, 106 to give security if required by association 105 or cashier to certify payment of instalments of capital 110 to verity final statement of organization 112 may sign annual certificate upon examination of bonds depos ited 117 to verify semi-annual returns 126 reports made to Comptroller 150 and reports of dividends and net earnings 150, 151 and cashier to keep list of stockholders 125 or cashier to certify to comptroller vote of liquidation 128 of redemption bank may waive protest 131 may be removed at any time by board of directors 105 PEIOKITY OF PAYMENT, no right of, in the United States as against private creditors, except for amount expended in redeeming notes of insol vent banks 135 PROXY, shareholders may vote by 108 no officer, clerk, teller, or book-keeper to act as 108 PURCHASE OF SHAEES, by banks, when prohibited 123 REAL ESTATE may be bought, held, and conveyed by banks 118 limitations of the privilege 118, 119 may be taxed by state authority 127 RECEIVER, appointed by Comptroller, and subject to his direction 133 to give security and take possession of books and assets 133 collect all debts, dues, and claims 13-1 his power over residue of proceeds of bonds deposited, diversity of opin ion concerning 133, 134 debts to which proceeds of assets may be applied by 134 succeeds to right of appeal in certain cases 134 is a United States officer, and may bring suits in his official capacity in United States courts 134 may obtain from a district court of United States authority to compro mise doubtful debts 134 is the statutory assignee who must institute suits for recovery of debts due bank; creditors of banks not properly parties 134 a proper party in proceedings for adjudication of claims against bank .. 135 may, under order of court, compound doubtful debts, and sell real and personal estate 134 may, if necessary to pay debts of association, enforce individual liability of stockholders. (See Personal Liability.) 134 moneys realized uy, to be deposited with Treasurer, subject to order of Comptroller 134 expenses of, to be paid from assets before distribution . 136 may be enjoined by United States courts 135, 136 202 INDEX. PAGB, NATIONAL BANKS Continued: REDEMPTION, in case of voluntary liquidation; notice to holders 128 compulsory liquidation; notice to holders 132 by Treasurer, regulations concerning 53 Comptroller, provisions concerning 156 provisions relating to, by banks while in operation 120-122, 135 REDEMPTION AGENCIES in New York city to be selected by banks in Albany, Bal timore, Boston, Chicago, Cincinnati, Cleveland, Detroit, Louisville, Milwaukee, New Orleans, New York, Philadel phia, Pittsburgh, Saint Louis, San Francisco, and Washing ton City 122 to be selected by other banks; where 122 selection of, subject to Comptroller s approval 122 public notice of, to be given by Comptroller 122 failure to select; penalty for 122 selection of, not to relieve banks from obligation to redeem at home 122 REMOVAL OF BANKING ASSOCIATIONS, from one state to another 157 REPEAL OF ORIGINAL BANKING ACT.. 141 REPORTS, not less than five, to be made by each bank during the year 149 form of, to be prescribed by Comptroller 150 to be verified, and how ; what to exhibit 150 published; where and how; expense to be paid by banks; proof of publication 150 special, may be required; when 150 penalty for failure to transmit 150 of dividends and of net profits to be made to Comptroller 150, 151 RESERVES to be kept by currency banks for purposes of redemption. (See Gold Banks.} 120-122 not less than two-fifths to consist of United States notes 120, 148 three-fifths may consist of three per cent, certificates 28, 120 three per cent, certificates called in, not available for 147, 154 certificates of deposit may be used for 27, 28, 120 of banks in redemption cities to be not less than 25 per cent, of aggre gate circulation and deposits. , 120 of all other banks not less than 15 per cent 120 when below the limit, to be restored to the required proportion 120, 121 until restored, liabilities, with certain exceptions, not to be increased... 121 no dividends to be made 121 of banks whose notes are redeemed in New York may, to the extent of three-fifths, consist of available balances due at redemption agency 121 of banks in redemption cities may, to the extent of one-half, consist of cash deposits in New York 122 of all banks may consist in part of clearing-house certificates 121 RICHMOND, when to be added to list of cities, etc. (See Charleston.} 121 SAN FRANCISCO, gold banks at, need not redeem at New York 122 SEAL, of Comptroller of the Currency, provisions relating to 102 corporate, may be adopted by banking associations 105 INDEX. 203 PAGE NATIONAL BANKS Continued: SECRETARY OF THE TREASURY: His approval requisite as to sureties of Comptroller 102 form of seal 102 organization of banks where population is not over 6,000 104 appointment of receivers 121 special agents 132 bank examiners... 13V withdrawal of circulation from States having an excess 155, 156 removal of banks from such States to States en titled to increase 157 To authorize the voluntary exchange of securities deposited Ill and to prescribe the conditions of exchange in case of depreciation 117 apportion circulation in certain cases 114 control the manner of engraving plates and dies 115 and the form and contents of circulating notes 115 appoint one of four persons to superintend the burning of worn-out and muti lated notes 116 and prescribe regulations relative thereto 116 designate banks as depositaries, and make regulations concerning them 130 require from such depositaries satisfactory security 130 regulate the manner of notifying holders of the notes of insolvent associations, 132 disposition of such notes after redemption , 132 withdrawal of circulating notes by banks of issue 146 issue temporary loan certificates 28, 147 and redeem and cancel the same in proportion to increase of national bank circulation 29, 153 SHARES, par value of, $100 108 of State banks when converted into national, may continue as before 120 held by executors or other trustees, subject to liabilities imposed on origi nal stockholders 142 SHAREHOLDERS, names and residence to be stated in preliminary certificate 104 entitled to one vote on each share 108 delinquent, may not vote 108 may be sold out on notice 110 by transfer, succeed to rights and liabilities of prior holders 108 liability of, several and not joint 108 extent of, denned 108 in case of State banks converted 108 may fix date of election in certain cases 107 by vote of two-thirds in interest may reduce capital stock 109 or go into liquidation 127 limitation and conditions of reduction 109 list of, provisions concerning 125 SOLICITOR OF THE TREASURY, to have supervision of suits, &c 138 SPECIAL AGENT for investigation of banks 132 appointed by Comptroller with approval of Secretary ..... 132 \o report to Comptroller 132 204 INDEX. PAQH NATIONAL R ASKS Continued: STATE BANKS, converted into national ; liability of shareholders when limited to amount invested 108 when to pay tax due from former bank 146,147 conversion of, how effected..., 129 shares to remain as before; directors continued 129 receiving assets, acquire liabilities of old banks 129 such assets include right of action for damages resulting from fraudulent misapplication of property of former bank 129 may continue to hold stock in other banks 130 when to commence business; conditions annexed 130 with branches, may keep branches in operation 129, 145 SUITS AND PROCEEDINGS, against banks under the banking laws, to be conducted by district attorneys, subject to supervision of Solicitor 138 private counsel may appear in 138 where and in what courts to be had 138 different opinions in Massachusetts and New York 138-139 to be instituted by Comptroller in his own name 130, 137 may be brought by as well as against banks 138 TAX, imposed by State authority 86, 126, 127 where to be levied 126, 148 limitations concerning 126, 148 notes and decisions relative to 126, 127 by federal authority; existing taxation 125, 126, 159 amount of, may be reserved by Treasurer out of in terest falling due on bonds deposited 126 semi-annual returns to be made, relative to circulation, deposits, and capital. 126 verified by oath of president and cashier 126 in case of default in making returns, how assessed 126 penalty for such default, and how collected 126 of ten per cent, on notes of State banks paid out: held by Supreme Oourt of United States to be constitutional , 145 applies to notes which a bank pays out of its own issue.... 145, 146 on notes of towns, cities, or municipal corporations paid out 148 regulations for ascertainment and payment of 160-164 TRANSFER OP STOCK, when binding as to transferee in good faith; bank when liable for value of stock 106 UNITED STATES BONDS, definition of, as used in banking laws 103 VICE-PRESIDENT, to be appointed by board of directors 105 may sign circulating notes 115 VOLUNTARY LIQUIDATION, may be ordered by vote of shareholders 127 notice of, to be certified by president and cashier, under seal, to Comptroller, and published 128 in case of, how notes may be redeemed under regulations.. 53 NAVY PENSION FUND: Origin and object of 29 Amount of 30 NOTES: Fractional, not to be issued by individuals, private corporations, or banking asso ciations .. 45 INDEX. 205 NOTES Continued: Of individuals and of State banks, paid out, ten per cent, tax on ................. 145, 146 Of towns, cities, and municipal corporations, do. do ........................................ 148 (See United States Notes. Old Demand Notes. National Banks.) 0. OBLIGATION: Of the United States to pay in coin, according to contract ............................ 79, 82 OLD DEMAND NOTES: Originally limited to fifty millions ................................................................ 43 Increased to sixty millions, and date of issue limited ......................................... 43 Superseded by United States notes, under act of February 25, 1862 ..................... 35 but equivalent to coin for public dues, duties, &c ................................... 44, 82 When presented, are redeemed in coin and canceled .......................................... 44 No longer issued ..................................................................................... 44 OREGON WAR DEBT: Origin of ................................................................................................. 21 Bonds payable to order, with coupons payable to bearer .................................... 22 transferable by assignment only .......................................................... 22 OVER-DUE COUPON BONDS: Legal rules applicable to- ........................................................................ 64, 65 OVER-ISSUE: Of bonds, notes, or currency; none ever redeemed or presented for payment ......... 25 P. PACIFIC RAILWAY BONDS: Known as "currency sixes;" description of ......................... ........................... 31 Are all registered and payable in lawful money ............................................... 31 Are purely Government obligations ............................................................... 31 Schedule of bonds issued ......... ...................................................................... 32 Acts authorizing issue ........................................................ , ................... 33, 34 Security of the Government, conditions annexed, &c .................................... 33, 31 Provisions relative to priority of liens ............................................................ 34 Preference in transportation reserved to the Government ................................... 31 POSTAGE CURRENCY: Origin of, and laws relating to ......................... ........................................ 44, 45 Withdrawn, and fractional currency substituted. (See Fractional Currency ) .......... 47 R. REBATE OF INTEREST: When exacted; what interest subject to ....................................................... 71 Detached coupons, when subject to. (See Interest.) .......................................... 77 REDISTRIBUTION OF CURRENCY NOTES: (See National Banks) ..................... 155 REDUCTION OF THE PUBLIC DEBT: By purchase of bonds; authority for ............................................................. 72 By operation of the sinking fund ............................................................. 82-85 Comparative statement, of .......................................... .......................... 92,93 Monthly debt statement ............................................................................. 78 REGISTERED BONDS: Transfer of, regulations concerning ............................................. ............. 55-6(? 206 INDEX. PAGE. REGISTERED BONDS Continued: Transfer of, by representatives of deceased owners 57 in case of owners dying abroad 57 general forms for 58-60 books, when closed and for what period ; 56 of stock during such period; how it affects payment of interest 57, 69 Power of attorney to collect interest 70 Interest on, of funded loans, payable by check sent through the mails 69 of all other loans, payable at designated offices 69 Designation to be made by holders 69 Interest on, when not claimed 70 When lost or stolen, notice to be given 60, 62 Lost or destroyed, may be duplicated 61 Mutilated or defaced ; regulations concerning 63, 67 Acts authorizing issue of duplicates 61, 66, 68 Cannot be converted into coupon bonds 68 RESERVES: Of United States notes in Treasury, authorized by law; acts relating to 37, 39 construction of the law as practically adopted 38 limit of reserve forty-four millions 40 Of coin in Treasury. (See Coin) 72 Of lawful money to be kept by banks. (See National Banks] 27, 28, 120-122, 147 Of coin to be kept by gold banks. (See National Banks) 154 RULES AND REGULATIONS: For redemption of mutilated and defaced currency 49-54 transfer of registered bonds 55-60 duplicating certificates, when lost or destroyed 62-64 defaced bonds, coupon or registered 66-68 payment of interest on registered bonds 69, 70 sales of gold and purchase of bonds 73-75 payment of detached coupons. 76, 77 Practically governing the management of the sinking fund 82-85 Relating to the payment of duties by national banks 160-164 S. SALES OF BONDS, in case of insolvent banks. (See Comptroller of the Currency.") 133, 156, 157 SALES OF GOLD: Act of authorization 72 Practice of the Department since March, 1869 73 Public notice given; form of 73 Proposals for purchase; form of 75 SAVINGS BANKS: Deposits in, may be taxed by State authority 86 How taxed, and to what extent, under Federal authority 144,159 SINKING FUND: Law establishing 82 When fund commenced 83 Bonds purchased for, canceled and destroyed 84 Act of Congress requiring cancellation 83, 84 INDEX. 207 PAGE. SINKING FUND Continued: Management of; accounts, how kept 84 Not a source of expense to the Government 85 When it will extinguish the public debt 85 SIXES OF 1381: (See Bonds payable in Coin.) Synonym for loan of 1863 16 loan of July and August, 1861 20 loan of February, 1861 22 STATE BANKS: (See Banks and Banking Associations. Taxation.) 99 STOLEN BONDS: If registered, Treasury Department should be notified; duplicates may be obtained.. 60 If coupon, Government affords no remedy 66 T. TAXATION UNDER FEDERAL AUTHORITY 159 Of bonds and other obligations of the United States 87 On circulation, deposits, and capital of national banks 125, 146 Of ten per cent, on notes of persons and State banks, used for circulation and paid out by State or national banks 145 on notes of towns, cities, or municipal corporations, so used and paid out 148 On deposits, capital, and circulation of banks and bankers other than national banks 142, 143 payable semi-annually, but assessed monthly 158 meaning of capital employed 143, 158 On circulation of banks not levied when it does not exceed five per cent, of capital 146 On banks and other institutions for deposit of savings 144 no tax on deposits invested in United States securities 144 individual deposits to amount of $2,000 exempt 159 Under existing laws, notes relative to 159 Regulations concerning assessment and payment 160-164 TAXATION UNDER STATE AUTHORITY: On bonds and other obligations of the United States held by State or national banks 85,86 cases referred to 85, 86 On deposits in savings banks invested in United States securities 86 On shares in national banks 126 decisions and notes concerning 127 "Place" where tax on national banks may be levied 148 TEN-FORTY BONDS: Authority for issue of; description of 15, 16 Only loan redeemable in ten and payable in forty years - ]0 THREE-PER-CENT. CERTIFICATES: Act of authorization 47 Issued for purpose of retiring compound-interest notes ? 28, 147 Piincipal and interest payable in lawful money on demand 28. 147 May be held as portion of bank reserves 28, 14? 208 INDEX, i THREE-PER-CENT. CERTIFICATES Continued: Original limit fifty millions, increased to seventy-five .*. 29, When they cease to bear interest 29, TREASURY NOTES: (See Old Demand Notes.} U. UNCLAIMED INTEREST: On registered stock, when and how disposed of , after/ ninety days, collectable only at Treasury UNITED STATES BONDS: (See Bonds) 1 UNITED STATES NOTES: Acts of authorisation 3 Limit of issue; highest amount issued 38 Retirement and cancellation of; act suspending the same Amount then outstanding 356 millions Cannot be reduced without further legislation Reserve of forty-four millions; how created 3 use of, discretionary Redeemable in coin ; question adj udicated Constitutionality of legal-tender provisions When not a legal tender; decisions on the subject Four different issues of ; when made 42 First two issues of, exchangeable for 5-20 bonds Not exchangeable for bonds since July 1, 1863 None of first three series reissued after redemption Printed on distinctive paper; penalties in certain cases Mutilated or defaced, regulations for redemption of. 49 Redemption of, in coin, the faith of the United States solemnly pledged to Withholding of, from use, when a misdemeanor I -I 94 ? it U.C.BERKELEY LIBRARIES