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Author: 
 
 Title: 
 
 How to organize a 
 national bank under 
 
 Place: 
 
 Philadelphia 
 
 Date: 
 
 1863 
 
^f-'f^f/^-^S 
 
 COLUMBIA UNIVERSITY LIBRARIES 
 PRESERVATION DIVISION 
 
 BIBLIOGRAPHIC MICROFORM TARGET 
 
 MASTER NEGATIVE # 
 
 ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD 
 
 Business 
 
 D732 
 C77 
 
 Cooke, Jay, & Co. 
 
 How to organize a national bank unaei' Secre 
 taxy caiase's bill. Corap. and presented by 
 Jay Cooke & Co., Bankers. Philadelphia, 
 Ringwalt & Brown, Steam-power Book and Job 
 Printei'B, 1863. 
 
 36 p. 
 
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 Ilo-r to or-^anize a national bank under 
 Secretar-r Chase's bill. 
 

 4 
 
 ^ 
 
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 Columbia ^^nittet^ftp 
 
 THE LIBRARIES 
 
 I 'i4 / -^ ■'/ 
 
 Graduate 
 SCHOOL OF BUSINESS 
 
 t 
 
 •^' 
 
 C5*@ 
 
 HOW 
 
 TO 
 
 V * 
 
 ORGANIZE A NATIONAL BANK 
 
 rNDER 
 
 SECRETARY CHASE'S BILL 
 
 COMPILED AND PRESENTED BY 
 
 JAY COOKE & CO., Bankers, 
 
 143 South Third St., PHILADELPHIA, and 
 452 Fifteenth Street, WASHINGTON, D. C. 
 
 { 
 
 i . V 
 
 PHILADELPHIA: 
 
 ALT & BROWN, STEAM-POWER BOOK AND JOB PRINTERS, 
 Nos. Ill and 113 South Fonrtta Street. 
 
 1863. 
 
 
 \ 
 
LIBRARY OK 
 
 THE REFORM CLUB 
 
 SOUND GURfltNCY COMMITTKK, 
 
 02 Winiafti St.. N«w York. 
 
 HOW 
 
 TO 
 
 ORGANIZE A NATIONAL BANK 
 
 SECRETARY CHASE'S BILL. 
 
 COMPILED AND PRESENTED BY 
 
 JAY COOKK & CO., Bankers, 
 
 143 South Third St., PHILADELPHIA, and 
 
 452 Fifteenth Street, WASHINGTON, D. C. 
 
 PHILADELPHIA: 
 
 RINGWALT & BROWN, STEAM-POWEE BOOK AND JOB PRINTERS. 
 
 Xos. Ill and 113 South Fourth Street. 
 
 1863. 
 
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 Necessary to Organize a, Bank under the act to /jrovide a National Currency, secured 
 by a pledge of United States Stocks, and to provide for the circulation and redemption 
 thereof. Approved February 25, 18G3. 
 
 First. Select as associates, not less than five men, of undoubted 
 integrity and responsibility. 
 
 Second, Procure subscriptions to the amount of proposed capi- 
 tal, which must not be less than fifty thousand dollars in any 
 locality ; but in any town or city where the population is over ten 
 thousand, it must not be less than one hundred thousand dollars. 
 
 Third. Make out your " Certificate of Organization " and 
 "Articles of Association," to be forwarded to "Hon. Hugh 
 HcCulloch," the " Comptroller of the Currency," at Wash- 
 ington. 
 
 The Certificate of Organization must be acknowledged before 
 a Judge of some Court of Record or a Notary Public, by all the 
 stockholders, not less in number than five, and the acknowledg- 
 ment thereof certified under the seal of such Court or Notarv, 
 and it must be executed by the parties under seal. 
 
 The Certificate of Organization requires a five cent stamp, and 
 the Articles of Association a five cent stamp for each sheet of 
 paper used. 
 
 The Articles of Association may provide for any increase of 
 capital deemed expedient, subject to the limitations of the Act. 
 Forms of these two papers will be found annexed, marked " A" 
 and "B." 
 
 When the foregoing forms have been complied with, the " Cer- 
 tificate" and a certified copy of the Articles of Association can 
 be forwarded to the " Comptroller of the Currency," which will 
 secure the right of title of First, Second or Third, etc., etc., 
 National Bank, according to priority of application, in the place 
 where the Bank is to be located ; after which the following pro- 
 ceedings will be necessary to perfect the Organization : 
 
 I 
 
\ 
 
 *ll 
 
 Fourth. Elect not less than five, nor more than nine Directors, 
 on the day named for the election in the Articles of Association, 
 and have them sworn. Every oath requires a five cent stamp. 
 
 A form of oath is hereto annexed, marlad " C." 
 
 Fifth, Have the officers appointed hy the Board of Directors, 
 as specified in the Articles of Association. 
 
 Sixth. Call in or collect at least thirty per cent, of the sub^ 
 scriptions to the Capital Stock. 
 
 Seventh. Adopt By-Laws for the government of the Associa- 
 tion. 
 
 Eightli. Deposit with the Treasurer of the United States, 
 Registered or Coupon interest-bearing Bonds of the Inited 
 States, to an amount not less than one-third of the capital stock 
 paid in. On the certificate of each bond (coupon or registered) 
 to be deposited with the Treasurer, as the basis of the National 
 Currency to be issued thereon, there must be written or jirinted, 
 to be signed by the President or Cashier of the Association 
 depositing the same, substantially the following words: *'This 
 bond is deposited with the Treasurer of the United States, by the 
 (here insert the No.) National Bank at (here insert the name of 
 the place) in trust for the said Bank, and to secure the redemption 
 and payment of the circulating notes delivered to said bank under 
 the act of Congress, entitled 'An Act to provide a National Curren- 
 cy, secured by a pledge of United States stocks, and to provide for 
 the circulation and redemption thereof, a improved February 25th, 
 
 1863.'" 
 
 When registered bonds are deposited, they must be issued to 
 the Treasurer of the United States, in trust for the Bank deposit- 
 ing the same. 
 
 It is desirable that no bonds of a less denomination than one 
 thousand dollars should be offered for deposit. 
 
 Ninth. Forward to the Comptroller of the Currency a copy of 
 the oath of Directors, marked " C," together with a certificate 
 sif^ned by the Officers and Directors, notifying him that at least 
 thirty per cent, of its capital has been paid in, that the Associa- 
 tion has complied with all the provisions of the Act as reiiuired, 
 and is desirous of commencing business. A form of this certifi- 
 cate is annexed, marked " D." This being done, the Comptroller 
 will (after examination of the condition of the Association) grant 
 
 *ITl ^i rKr iW( IW I<lB »i M n irt m .i w 
 
 
 5 
 
 his certificate, showing that the Association lias complied with all 
 the provisions of the Act, and is entitled to counnence the busi- 
 ness of banking under it ; wlien it shall be the duty of the Asso- 
 ciation to publish said Certificate in some newspaper of the 
 county for at least sixty days ; and immediately on its puldica- 
 tion, it will be authorized to commence business as a National 
 Bank. 
 
 The Bank should at once adopt a form of seal, and forward a 
 certified copy of the impression of said seal to the Comptroller. 
 
 After Banks shall have commenced business, thev will have 
 certain duties to perform under the Act, and the following brief 
 explanations of various section^^ will be found convenient : 
 
 It is presumed, however, that every bank will have its ow^n 
 legal adviser, to consult with in reference to any portion of the 
 Act, which may not be here satisfactorily explained. 
 
 It will be the duty of all banks under the Seventh Section of 
 the Act, who have paid in but thirty per cent, of their capital at 
 the time of commencement of business, to collect in at least ten 
 per cent, of the remaining capital every two months, until the 
 whole is paid in. And if any shareholder or his assignee shall 
 fail to pay such instalments, as they may be called in, the Eighth 
 Section provides that his stock shall be sold at public auction, as 
 provided in said section, and if not sold as specified therein, the 
 stock shall be forfeited to the Bank. 
 
 Section 11. Provides that the by-laws of the bank must be 
 approved by the Comptroller, and stipulates what banking privi- 
 leges are conferred under the Act, and that the business of the 
 bank must be conducted at the place specified in the Certificate of 
 Association, and not elsewhere ; and also seems to require that 
 the Articles of Association should limit or fix the time for which 
 the association is to continue. 
 
 Section 12. Provides for the transfer of stock as may be pre- 
 scribed in the By-I^aws or Articles of Association ; secures the 
 rights of creditors, who may become such by the transfer of 
 stock, and further provides that all shareholders shall be liable 
 for the debts of the Association to the amount of their shares at 
 their par value, in addition to the amount invested in such shares ; 
 or, in other words, to double the amount of their stock. This is 
 one of the best features of the law, as it is an additional security 
 
 I. 
 
6 
 
 to the note holder against loss in any contingency, and all stock- 
 holders being thus liable, will have a direct personal interest in 
 seeing that the affairs and management of the Bank are entrusted 
 to none but the most capable, honest and responsible officers. 
 
 Section 13. Provides for the increase of Capital, (if specified in 
 the Articles of Association) but such increase shall not be valid 
 until the whole amount of such increase has been paid in, and the 
 Comptroller notified thereof. 
 
 This increase may be made (if desired) before the full amount 
 of instalments of the original capital shall be paid in, provided 
 said increase shall be paid in full, and provided, also, that such 
 instalments shall be punctually paid within the time specified 
 in the seventh section of the Act. 
 
 Section 14. Provides that the Bank may hold the following 
 real estate : 1st. Such as may be necessary for its accommoda- 
 tion in the transaction of its business ; 2d. Such as shall be mort- 
 gaged to it in good faith, for loans or money due ; 3d. Such as 
 shall be conveyed in satisfaction of its debts ; 4th. Such as it 
 shall purchase under judgments, decrees, or mortgages held by 
 the Bank ; but in no other case, and for no other purpose, shall it 
 purchase or hold real estate. 
 
 Section 16. Provides that the Bank shall receive from the Comp- 
 troller circulating notes of different denominations, equal to ninety 
 per centum of the current market value of United States six per 
 cent, bonds, transferred and delivered to the Treasurer, but not 
 exceeding the par value thereof; and no Bank shall receive a larger 
 amount of circulating notes, than the actual amount of its capital 
 paid in. 
 
 These notes will be supplied to the Banks in the order in which 
 they are organized; that is "first come, first served." 
 
 Section 17. Limits the entire circulation to ^300, 000,000, and 
 apportions it amongst the different States, (fee. 
 
 Section. 18. Provides that the circulating notes under this act 
 shall be supplied to the banks by the Comptroller in denominations 
 of 5, 10, 20, 50, 100, 500 and 1000 dollars as may be required by 
 the Banks; these notes to specify that they are secured by the 
 United States bonds, and to express upon their face the promise 
 of the Bank, to pay them on demand at its place of business, 
 attested by the signature of the President or Vice President and 
 
 V\A' 
 
 Cashier. After these conditions are complied with, the Bank is 
 then authorized under the 20th Section to pay out and circulate 
 these notes as money, and by the same section of the Act, they 
 are to " be received at par in all parts of the United States in 
 payment of taxes, excises, public lands and all other dues to the 
 United States, except for duties on imports; 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 public debt ; 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." 
 
 Sections 21, 22 and 23. Provide the mode and manner in which 
 bonds deposited with the Treasurer under this Act, may be 
 transferred back to the Bank or to other parties ; but no such trans- 
 fer can be made, unless sanctioned by the request of the Comp- 
 troller of the Currency, or the order thereof upon the Treasurer. 
 
 All possible guards and protection are provided against loss to 
 the Banks of these bonds by fraud or otherwise, while they are in 
 possession of the Government as security, and the Banks not only 
 have the privilege, but it is made their duty by the 23d Section, 
 to examine their bonds deposited with the Treasurer, once or 
 oftener every year, and compare the bonds so pledged, with the 
 books of the Department. 
 
 Section 24. Provides that every Bank shall make a quarterly 
 report to the Comptroller, of the condition and business of the 
 Bank ; and in addition to this quarterly report, every Bank in 
 Boston, Providence, New York, Philadelphia, Baltimore, Cin- 
 cinati, Chicago, St. Louis and New Orleans, shall publish monthly 
 reports of the condition of their Banks, in respect to the following 
 items : Average amounts of loans and discounts, specie, deposits 
 and circulation ; and each Bank is also to publish quarterly reports 
 as prescribed in this section. 
 
 Section 25. Provides the remedy, in case any Bank shall fail 
 to redeem its circulating notes on presentation. 
 
 Section 29. Provides rules and regulations for the winding up of 
 all suspended Banks. 
 
 Section 30. Provides that all bonds deposited with the Treas- 
 urer, shall be held exclusively as security for its circulating notes, 
 and that the Comptroller shall give to each solvent Bank, a power 
 
1 
 
 8 
 
 of attorney to draw the interest on its bonds thus held ay security 
 so long as the Bank shall continue to redeem its notes ; and the 
 Comptroller shall return to any Bank, any of said bonds in sums 
 not less than one thousand dollars, upon tlie surrender to him, and 
 cancellation of a proportionate amount of circulating notes; pro- 
 vided that 90 per centum of the market value of the remaining 
 bonds, shall at all times be equal to the amount of all the circula- 
 ting notes retained by the Bank. 
 
 The payment of interest on said bon«ls is suspended by the 
 tlurty-first section^ until the accumulated interest, when added to 
 the market value of the bonds, shall equal the amount for which 
 said bonds were pledged : and the Comptroller shall every three 
 months invest the sums so retained in bonds of the United States, 
 in trust for the banks interested ; and Avhen the price in 
 New York of such depreciated bonds shall rise to the value at 
 which they were pledged, and so remain for four consecutive 
 weeks, the investment shall be assigned to each Bank. 
 
 Section 82. Provides for the return and destruction of Horn out 
 or mutilated notes, and receiving in their place new circ^ulating 
 notes of an equal amount. 
 
 Under Section 34, the Banks are liable for all expenses of pro- 
 testing their circulating notes, expenses of preliminary or other 
 examinations, and all expenses of any receivership : none of 
 which expenses can be paid from the bonds deposited by such Banks. 
 
 Section 35. Provides that the stockholders, collectively, of any 
 Bank shall at no time be liable to such Bank, either as debtor or 
 sureties, or both, to an amount more than three-nfths of the stock 
 actually paid in, and undiminished by losses or otherwise ; nor 
 shall the Directors be so liable, except to such an amount, and in 
 such manner, as shall be prescribed by the By-Laws. 
 
 Section 36. Provides that the shares of stock shall be one hun- 
 dred dollars each, and no shareholder shall have power to sell or 
 transfer his stock so long as he is lial»le as debtor, surety or 
 otherwise to the Bank for any debt due and unpaid: nor shall he 
 receive any dividend, interest or profit, on such shares, so long as 
 such liability continues ; but all such profits shall be applied to 
 the liquidation of the debt : and no stock shall be trimsferred 
 without the consent of a majority of the Directors, while the 
 holder is in(le])ted to the Bank. 
 
 V 
 
 % 
 
 9 
 
 Section 37. Provides that no Bank shall loan money on its own 
 stock, but shall require the same security for loans to its stock- 
 holders, that it would from other persons : and no Bank shall hold 
 or purchase any of its own stock, or the stock of any otlier incor- 
 porated company, unless such purchase shall be necessary to 
 prevent loss upon debt, previously contracted on other security ; 
 and stock so purchased or acquired cannot be held longer than 
 six months, if the same can be sold within that time for cost. 
 
 Section 38. In all elections, and at all meetings of stockhold- 
 ers, each share shall be entitled to one vote, and shareholders 
 may vote by proxy; but no officer of the Bank can act as proxy, 
 and no stockholder whose liability is past due can vote. 
 
 Section 39. Provides for not less than five, nor more than nine 
 Directors, one of whom shall be President ; each must be a citi- 
 zen of the United States, and resident of the State : and three- 
 fourths of them must have resided in the State one year previous 
 to their election ; and each Director must own in his own right, at 
 least one per cent, of the capital stock, not exceeding §200,000, 
 and the half of one per cent., if over $200,000 capital. Each 
 Director must be sworn as directed in this section, and the oath 
 immediately transmitted to the Comptroller. 
 
 Section 40. Provides for the election of Directors in Januarv of 
 each year after the first election, and the mode of filling vacan- 
 cies, etc., etc. 
 
 Section 41. Provides that every Bank shall keep on hand, at 
 all times, in lawful money of the United States, at least twenty- 
 five per cent, of its notes of circulation and deposits, and if at 
 any time it falls below this, the Bank is precluded from increasing 
 its liabilities by making new loans or discounts, except purchas- 
 ing bills of exchange, payable at sight : and it shall declare no 
 dividends until the condition of the Bank shall correspond Avith 
 the above provision. 
 
 Clearing House certificates, representing specie specially 
 deposited, by Banks belonging to such Clearing House, shall 
 be deemed lawful money under tliis provision for Banks own- 
 ing the same, and any balance due Banks organized under 
 this act, located in other places, from an}^ Banks in Boston, 
 Providence, New York, Philadelphia, Baltimore, Cincinnati, 
 Chicago, St. Louis, or New Orleans in good credit, subject to be 
 
10 
 
 drawn for at sight in lawful money, shall be deemed a part (to 
 the extent of three-fifths) of the lawful money required to be 
 held under this provision by Banks in any place, except the cities 
 above mentioned. 
 
 And if any Bank shall fail to make good its reserve of lawful 
 money for thirty days after notice from the Comptroller, a 
 receiver shall be appointed to wind up its business. 
 
 Section 42. Limits the entire indebtedness of a Bank to the 
 amount of its capital stock actually paid in, and undiminished by 
 losses, except on the following accounts : First, on account of 
 its notes of circulation ; second, on account of moneys deposited 
 with, or collected by, such associations ; third, on account of bills 
 of exchange, or drafts drawn against money actually on deposit 
 to the credit of such association, or due thereto; fourth, on 
 account of liabilities to its stockholders, for money paid in on 
 capital stock, and dividends thereon, and reserved profits. 
 
 Section 43. Prohibits any Bank from pledging, or hypothecat- 
 ing any of its notes of circulation, for any purpose. 
 
 Section 44. Prohibits any Bank from impairing, or withdrawing 
 any of its capital, by loans to stockholders for a longer time than 
 six months, or in any other manner whatever ; and no dividend 
 shall be made if the losses at any time shall equal the undivided 
 profits on hand ; and no dividend shall ever be made to an 
 amount greater than its net profits on hand after deducting all 
 losses and bad debts. 
 
 Section 45. Specifies May and November as the periods for 
 semi-annual dividends, and provides that on each dividend day the 
 cashier shall make under oath, and transmit to the Comptroller of 
 the Currency, a full, clear and accurate statement of the condition 
 of the Bank as it shall be on that day, after declaring the divi- 
 dend. Full account of the particulars required in this statement 
 will be found in this section. 
 
 Section 46. Provides that Banks will charge only such interest 
 as shall for the time be the established rate in the State where 
 the Bank is located ; and such interest may be reserved or taken 
 in advance, according to the usual rules of banking ; and a viola- 
 tion of this section forfeits the debt on which excess of interest is 
 taken. But the Bank may purchase, discount, or sell bills of 
 exchange at the current discount or premium. 
 
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 11 
 
 Section 47. Provides that no person, company or firm, (includ- 
 ing the several members thereof,) shall become indebted to the 
 Bank as borrower, to the amount exceeding one-tenth of its capital 
 tal paid in, and as borrower and on bills of exchange, not exceed- 
 ing one-fifth of its capital, and as borrower on bills of exchange 
 and acceptor, not exceeding one-third of its capital paid in. 
 
 Section 48. Prohibits the Bank from paying out or circulating 
 in any manner the notes of any other Bank or association, which 
 it will not receive at par itself, on deposit, or in payment of debts 
 due the Bank ; and it shall not pay out, or circulate the notes of 
 any Bank, which at the time is not redeeming its notes in lawful 
 money of the United States. 
 
 Section 49. Provides that transfer of the assets of a Bank, of 
 any kind, and all payments of money, to either shareholder or 
 creditor, made after the commission of an act of insolvency, or 
 in contemplation thereof with a view to prevent the application 
 of its assets as provided in the Act, or with a view to the preference 
 of one creditor over another, except in the payment of its circulating 
 notes, shall be utterly null and void. 
 
 Section 50. Provides that if the Directors of the Bank shall 
 knowingly violate, or permit any of its officers to violate, any of 
 the provisions of the Act, all the rights, privileges, and franchises 
 of the Bank are forfeited ; and every Director engaged in, or 
 assenting to such violation, to be held liable in his personal and 
 individual capacity, for all damages which the Bank or any 
 person may sustain by such violation. 
 
 Section 51. Authorizes the Comptroller of the Currency, with 
 the approbation of the Secretary of the Treasury, to examine the 
 affairs of any Bank as often as he shall deem necessary, by an 
 Agent to be appointed, and the Bank to pay the expenses speci- 
 fied in this section. 
 
 Section 52. Specifies what punishment shall be inflicted on 
 officers, Directors, or agents, for certain misdemeanors, therein 
 
 enumerated. 
 
 Section 53. Provides that a full and correct list of the stock- 
 holders shall always be kept in the Bank, subject to the inspection 
 of the shareholders and creditors; and a certified copy trans- 
 mitted to the Comptroller at the beginning of every year, com- 
 mencing on the first day of the first quarter of the organizatoin. 
 

 12 
 
 Section 54. Authorizes the Secretary of the Treasury to make 
 Banks under this Act, depositaries of the public money whenever 
 he may deem it proper. 
 
 Sections 55 k 59. Relate to suits and proceedings in Court, 
 arising out of this act. 
 
 Section 56. Imposes a penalty of fifty dollars, for wilfully 
 mutilating any bank bill, draft, or evidence of debt, issued by 
 any of the Banks under this Act. 
 
 Sections 57 & 58. Relate to forgery : its penalty, &c. 
 
 Section 60. Defines the duty of the C-omptroller, in reference 
 to his Annual Report to Congress. 
 
 Sections 61, 62, 68, 64. Relate to State Banks already orga- 
 nized, and the mode and manner in which they mav avail them- 
 selves of certain benefits in this Act. 
 
 SmO:' 
 
 ^ 
 
 \, 
 
 luxation. 
 
 The following Extract from Section Seven of the law to provide 
 ways and means for the support of the Government, approved 
 March od, 1803, are substituted in Ucu of so much of Section 
 19 of the National Banking Law as relates to the Tax on 
 National Banks : 
 
 Section 7. And be it further enacted, That all banks, associations, 
 corporations, or individuals, issuing notes or bills, for circulation, 
 as currency, shall be subject to and pay a duty, of one per centum 
 each half year, from and after April 1st, 1808, upon the average 
 amount of circulation of notes, or bills, as currency, issued beyond 
 the amount hereinafter named — That is to say, banks, associations, 
 corporations or indviduals having a capital of not over one hundred 
 thousand dollars, ninety per centum thereof; over one hundred 
 thousand and not over two hundred thousand dollars, eighty per 
 centum thereof; over two hundred thousand and not over three 
 hundred thousand dollars, seventy per centum thereof; over three 
 hundred thousand and not over five hundred thousand dollars, 
 sixty per centum thereof; over five hundred thousand and not 
 over one million of dollars, fifty per centum thereof; over one 
 million and not over one million and a half of dollars, forty per 
 centum thereof; over one million and a half and not over two 
 millions of dollars, thirty per centum thereof; over two millions 
 of dollars, twenty-five per centum thereof." In the case of banks 
 with branches, the duty herein provided for, shall be imposed upon 
 the circulation of the notes or bills of such branches severally, and 
 not upon the aggregate circulation of all; and the amount of 
 capital of each branch shall be considered to be the amount allotted 
 to, or used by such branch, and all such banks, associations, corpora- 
 tions and individuals, shall also be subject to, and pay a duty of 
 one half of one per centum, each half year, from and after April 
 first, eighteen hundred and sixty three, upon the average amount 
 of notes or bills not otherwise herein taxed and outstandin<y as 
 
 to 
 
 currency, during the six months next preceding the return herein- 
 
 (13) 
 
 / 
 
14 
 
 after provided for ; and the rates of tax or duty imposed on the 
 circulation of associations, which may be organized under the Act 
 "to provide a National Currency, secured by a pledge of United 
 States Stocks, and to provide for the circulation and redemption 
 thereof;" approved February twenty fifth, eighteen hundred and 
 sixty three, shall be the same as that hereby imposed on the 
 circulation and deposits of all banks, associations, corp(»ration8, 
 or individuals, but shall be assessed and collected as required by 
 said Act. 
 
 Note. — The Taxation on circulation of National Banks is not collected separately as 
 in other cases, but is withheld or deducted from the interest accruing on bonds deposited 
 for circulation. 
 
 <> 
 
 t 
 
 y 
 
 V 
 
 As a practical illustration, there is given below 
 an exact copy of the papers used in organizing 
 the First National Bank in the District of Colum- 
 bia, H. D. Cooke, President, and Wm. S. Hunting- 
 ton, Cashier. This bank is now in full operation 
 in Washington, and prepared to attend to any 
 business forwarded by National Banks in other 
 parts of the country. 
 
 [COPY.] 
 
 Of the Fivist National Bank of Washington, D, 0. 
 
 [Five cent stamp.] 
 
 Washix(Jton, D. C, July 15, 1863. 
 
 We, whose names are specified in article fourth of this Certifi- 
 cate, have associated ourselves for the purpose of transacting the 
 business of Banking, under the act of Congress entitled "An Act 
 to provide a National Currency, secured by a pledge of United 
 States stocks, and to provide for the circulation and redemption 
 thereof," approved February 25, 1863. 
 
 First. The name and title of this Association shall be the 
 First National Bank of Washington. 
 
 Second, The said Association shall be located in the City of 
 Washington, county of Washington, and District of Columbia, 
 where its operations of discount and deposit are to be carried on! 
 
 Third. The capital stock of said Association shall be Five 
 Hundred Thousand Dollars, ($500,000) and the same shall be 
 divided into five thousand shares of one hundred dollars each 
 . (15) 
 
 
10 
 
 Fourth. The name and residence of cacli of the shareholders 
 of this Association, with the number of shares held by each, are 
 as follows : 
 
 H. D. Cooke, 
 
 H. C. Faiinestock, 
 
 Wm. S. Huntinuton, 
 
 B. B. French, 
 
 J. A. Wills, 
 
 Wm. G. Mooriiead, 
 
 Jay Cooke, 
 
 RESlDExVCE. 
 
 Washington, I). C. 
 Washington, I). C. 
 Washington, I). C. 
 Washington, D. C. 
 AVashington, I). C. 
 Philadelphia, I*a. 
 Philadelphia, I*a. 
 
 NO. OF SHARES. 
 
 950 
 
 900 
 
 25 
 
 25 
 
 100 
 
 1000 
 
 2000 
 
 FfftJi. Said Association shall commence on the fifteentli day of 
 July, 186:3. 
 
 Sixth. This Certificate is made in order that we may avail our- 
 selves of the advantages of the aforesaid Act. 
 
 Witness our hands and seals, this fifteenth day of July, 18(33. 
 
 H. L). Cooke, [Seal] B. B. French, [Seal] 
 
 H. C. Fahnestock, " John A. Wills, 
 
 Wm. S. Huntington, " Jay Cooke, per his 
 Wm. (I. IMooRHEAi), " Att'v II. D. Cooke, 
 
 u 
 
 District of Columbia, 1 
 
 County of Washington, j 
 
 On this the fifteenth day of July, A. J). 1863, personally came 
 before me, H. D. Cooke, H. C. Fahnestock, Wm. S. Huntington, B. 
 B. French, Wm. G. Moorhead, and Jay Cooke, by his attorney, II. 
 D. Cooke, to me well known, who severally acknowledged that 
 they executed the foregoing instrument for the purposes therein 
 mentioned. 
 
 Witness my hand and seal of office, the day and 
 [Notary Seal] year aforesaid. 
 
 [Five cent stamp.] 
 
 N. CALLAN, 
 
 Notary Public. 
 
 y 
 
 ^( 
 
 17 
 
 [COPY.] 
 
 Of the First National Bank of Washington, D. O. 
 
 "•-••»- 
 
 [Five cent Revenue Stamp.] 
 
 ARTICLES OF ASSOCIATION, 
 
 Entered into by and between the undersigned, for the purpose of organizing a Bank- 
 ing Association, to carry on the business of Banking, under the Act of Congress 
 entitled ''An Act to provide a Xational Currency, secured by a pjrdge of United 
 States stocks, and to provide for the circulation and redfwption thereof,'' 
 approved February 2o, 1803. 
 
 1st. The name and title of this Association shall be the First 
 National Bank of Washington. 
 
 2d. The place of business of this Association shall be at Wash- 
 ington, in the county of Washington, and District of Columbia. 
 
 3d. The Board of Directors of this Association shall consist of 
 the following stockholders :—H. D. Cooke, H. C. Fahnestock, 
 Wm. S. Huntington, B. B. French, and John A. Wills. 
 
 4th. The regular annual meetings of the stockholders for the 
 election of Directors shall be on the second Tuesday of January 
 of each year ; but if for any cause an election shall not be held 
 on that day, it may be held on some other day, according to the 
 provisions of the fortieth section of the Act. 
 
 5th. The capital stock of this Association shall be Five Hun- 
 dred Thousand Dollars ; but the same may be, from time to time, 
 increased, subject to the limitations of the Act of Congress above 
 referred to; and in such increase of capital each stockholder 
 shall have the privilege of subscribing for such number of shares 
 of the proposed increase of stock as he may be entitled to, 
 according to the number of shares owned by him before the 
 increase is made. 
 
 The shares of stock shall be one hundred dollars each. 
 
 6th. The Board of Directors (two-thirds of whom shall be a 
 quorum to do business) shall elect one of their number to be Pre- 
 sident, who shall hold his office (unless he should become disquali- 
 fied, or be sooner removed by a two-thirds' vote of all the 
 
HP 
 
 18 
 
 member, of the board) for the term for which he wa.s elected a 
 Director ; and thej shall have power to appoint a (.fishier, and 
 such other officers and clerks as may be required to transact the 
 business of the Association ; to fix the salaries to be paid to them 
 and to define their respective duties ; and to continue thorn in 
 office or to dismiss them, as, in the opinion of a majority of the 
 board, the interest of the Association may demand. 
 
 The Board of Directors shall by their By-Laws specify by 
 what officers of the Association, or committee of the board the 
 regular banking business of the Association shall be transacted ; 
 but no loan on real or personal security shall be made without 
 the consent thereto by a majority of the Directors. 
 
 The Board of Directors shall also have power to require bonds 
 from the officers of the Association, and to fix the penalty there- 
 of ; to regulate the manner in which elections of Directors shall 
 be held, and to appoint judges of the elections ; to provide for an 
 increase of the capital stock of this Association, and the manner 
 in which tlie increase shall be made ; to make all By-Laws that 
 may be required to regulate the business of the Association, and 
 generally to do and perform all acts which are proper to be done 
 by a Board of Directors, which are not inconsistent with these 
 Articles of Association, and subject to the limitations aiid restric- 
 tions of the Act of Congress under which this Association is 
 organized. 
 
 7th. This Association shall continue until the 25th day of Feb- 
 ruary, 1883, unless sooner dissolved by the act of a m'ajority of 
 the stockholders thereof. 
 
 8th. These Articles of Association may be changed or amended 
 at any time by a vote of stockholders owning a majority of the 
 stock of the Association, and any three stockholders may call a 
 meeting of the stockholders for this purpose. 
 
 WAsuixiiTOx, D. C, July loth, 1803. 
 
 [Copy.] 
 
 H. D. Cooke, 
 H. C. Fahnestociv, 
 Wm. G. Mooriiead, 
 Wm. S. Huntington, 
 
 [Seal] B. B. Fhencji, [Seal] 
 
 John A. Wills, " 
 
 Jay Cooke, per his 
 
 attorney, H. D. Cooke, '' 
 
 u 
 
 it 
 
 li 
 
 r 
 
 r 
 
 ( 
 
 [COPY.] 
 
 19 
 
 o 
 
 %iX\xxmX\tm. 
 
 -♦•♦ 
 
 District of Columbia, \ 
 Cmnty of Wmlungton. f ^^' 
 
 We, the undersigned. Directors of the First National Bank of 
 Washington, of the District of Columbia, do each of us solemnly 
 swear that we are citizens of the United States, and residents of 
 the City of Washington, and District of Columbia, and that we 
 will severally, as far as the duty devolves on us, diligently and 
 honestly administer the affairs' of this Bank, and that we will not 
 knowingly violate, or willingly permit to be violated, any of the 
 provisions of the Act under which this Bank is organized, and that 
 each of us is the bona fide owner, in his own right, of the stock 
 standing in his name on the books of the Bank, and that the same 
 IS not hypothecated, or in any way pledged as security for any 
 loan obtained or debt owing to this Bank, of which we are sever- 
 ally Directors. 
 
 Henry D. Cooke, Wm. S. Huntington, 
 
 H. C. Faiinestock, b. B. French, 
 
 John A. Wills. 
 
 Subscribed and sworn to this 16th day of Julv, before the 
 undersigned, a Notary Public of said county. 
 
 [Notary Seal.] x. CALLA::, 
 
 [Five cent stamp.] ^^^^^^.^^ p^^^^^j^^ 
 
 [Five cent stamp.] 
 
 The undersigned, H. D. Cooke, President, and William S 
 Huntington, Cashier, and IL D. Cooke, H. C. Fahnestock, AV^m S 
 Hmitington, B. B. French and J. A. Wills, Directors of the First 
 National Bank of AVashington, D. C, organized under the Act of 
 
\ 
 
 20 
 
 Congress entitled *' An Act to provide a National Currency, 
 secured by a pledge of United States stocks, and to provide for 
 the circulation and redemption thereof," approved February 25, 
 1863, do hereby certify : 
 
 That One Hundred and Fifty Thousand Dollars have been paid 
 into said Bank on account of its capital stock, as permauent capi- 
 tal ; that the residence of each Director, and the amount of stock 
 of which each Director is the bona fide owner, are as follows : 
 
 PLACE OF RESIDENCE. 
 
 Washington, 
 
 £( 
 
 (C 
 
 4( 
 
 (( 
 
 SHARES OF STOCK. 
 950 
 1)00 
 
 25 
 
 25 
 
 100 
 
 Directors. 
 
 NAME OF DIRECTOR. 
 H. D. CoOKE, 
 
 H. C. Fahnestock, 
 Wm. S. Huntington, 
 B. B. French, 
 John A. Wills, 
 
 And that this Bank has in good faith complied with all the 
 requirements of said Act to entitle it to engage in the business of 
 banking. 
 
 H. D. COOKE, President. 
 
 Wm. S. Huntington, Canhier. 
 
 H. D. CodKE, 
 
 H. C. Faicnestock, 
 B. B. Frknch, 
 John A. Wills, 
 Wm. S. Huntington, J 
 Dlstrict of Columbia, ) 
 County of Washington. / 
 
 On this sixteenth day of July, 18t>3, personally appeared before 
 the undersigned, of said county, H. D. Cooke, President, Wm. S. 
 Huntington, Cashier, and H. D. Cooke, H. C. Fahnestock, Wm. S. 
 Huntington, B. B. French, and John A. Wills, Directors of the 
 First National Bank of Washington, D. C, and made oath that 
 the foregoing certificate, and the matters and things therein set 
 forth, are true, to the best of their knowledge and belief. 
 
 Subscribed and sworn to before me, Nich'l Callan, this 16th 
 day of July, 1863. N. CALLAN, 
 
 [Notary Seal.] Notary Public. 
 
 [Five cent stamp.] 
 
 Mbmokanuum. 
 sufficient. 
 
 -The oaths of a majority of the Directors of an As'^ociation are 
 
 ^ 
 
 2a« 
 
 Treasury Department, 
 Office of Comptrolle7' of the Currency, 
 Washington^ July 16, 1863. 
 
 Whereas, by satisfactory evidence presented to the under- 
 signed, it has been made to appear that the FIRST NATIONAL 
 BANK OF WASHINGTON, IN THE COUNTY OF WASH- 
 INGTON, AND DISTRICT OF COLUMBIA, has been duly 
 organized under and according to the requirements of the Act of 
 Congress entitled ''An Act to provide a national currency, 
 secured by a pledge of United States stocks, and to provide for 
 the circulation and redemption thereof," approved February 25, 
 1863, and has complied with all the provisions of said Act rec^uired 
 to be complied with before commencing the business of Banking: 
 
 Now, therefore, I, Hugh McCulloch, Comptroller of the Cur- 
 rency, do hereby certify that the said First National Bank of 
 Washington, county of Washington, and District of Columbia, is 
 authorized to commence the business of Banking under the Act 
 aforesaid. 
 
 In testimony whereof, witness my hand and seal of office, 
 [l. s.] this 16th day of July, 1863. 
 
 HUGH Mcculloch, 
 
 Comptroller of Currency. 
 
 The above must be published by each association for sixty days, as directed in 
 Section 10. 
 
 in 
 
 Exiiluhihnj Modi nf Sccurinr; the IJejJOsit.^ of Inferno/ ll^ecw. 
 
 -♦•♦^^ 
 
 Treasury Department, August 20, 186:J. 
 The Act approved 25th of February, 1863, entitled '' An Act 
 to provide a national currency, secured by a pledge of United 
 States stocks, and to provide for the circulation and redemption 
 thereof," authorizes the employment of the National Banking 
 Associations created under it as depositories of the internal reve- 
 nue. Such employment, however, involves the duty of requiring 
 adequate security for the amounts deposited, and the extent and 
 nature of the security to be required have much occupied my 
 
00 
 
 thoughts. My final conclusion is to ask from the National Banks 
 desiring to receive such deposits to place in the Treasury of the 
 United States six per cent bonds to an amount equal to ten per 
 cent of their capital stock, and to give the bond of the Directors 
 and others to an amount equal to their capital stock as security 
 for the punctual payment of all lawful checks for deposits. On 
 receiving this security I propose to direct the Collector of Inter- 
 nal Revenue to make deposits with the Bank or Banks giving it. 
 
 Inasmuch, however, as a number of Banks have been organized, 
 and, as yet, are without circulation, I propose to direct deposits 
 to be made with such, on receiving from them the consent of their 
 respective Boards of Directors that the bonds already deposited as 
 security for circulation niay be held also as security for deposits, 
 leaving the additional bonds, as well as the bond of the Directors 
 and others, to be given afterwards at any time before the furnish- 
 ing of circulation. 
 
 Should your Association prefer, instead of giving a joint bond 
 equal to the capital stock, to give separate bonds of Directors and 
 stockhohlers, each for not less than one-tenth of the capital stock, 
 and equal to it in their aggregate amount, I see no objections to 
 such separate bonds being accepted instead of a joint bond. Each 
 bond, of course, should be accompanied by prooi' (the affidavit of 
 the maker being usually regarded as sufficient) of the ability of 
 the obligor to satisfy the penalty after payment of all debts. 
 
 As some time w ill yet elapse before circulation can be furnished, I 
 shall gladly receive and willingly consider any suggestions in regard 
 to public deposits and security therefor, and cheerfully modify the 
 conclusions I have arrived at, if goo'd reasons appear for doing so. 
 
 It will be understood, that in case the required security be not 
 given before the furnishing of circulation, any deposits which 
 may have been already made will be withdrawn before the circu- 
 lation is delivered. 
 
 (Signed,) S. P. CHASE, 
 
 Seoretary of the Treasury, 
 
 Note. — The form of Bond required from the Banks by the Treasury Depart- 
 ment will be prepared shortly by the Secretary of the Treasury, and furnished 
 on application, and will appear in a subsequent edition — together with full in- 
 structions as to the mode of receiving and paying deposits. It will be seen from 
 the above Circular that National Banks, as soon as formed, can avail themselves 
 of the privilege of becoming Government Depositories for internal revenue. 
 
 Y 
 
 -*;i 
 
 OENl^HAT. FORM 
 
 OF 
 
 %-%m$ of pational §aMfeis. 
 
 By-L<nr» of the Natutnaf, Biiuk, nf , onjain'znl undrr a,t art of 
 
 Congress, entitled ^^ An Act tiHn-(trlde a nutionulcunrnrtf. seair.,/ Ay f/ic 
 pledge of United Statrs sfoeks, and to proride for the eircidafion ond re- 
 dnnption thereof" c pprowd Fehruary tbth, I8G0. 
 
 Elections. 
 
 Sec. 1. The regular annual meetings of the stockholders of this 
 Bank, for the election of Directors, shall be held at its banking house, 
 on the second Tuesday of January of each year, between the hours 
 of ten and four of said day. Thirty days' notice of the time and 
 object of which meeting shall be given by the Cashier of this Bank, 
 by publication in \]iere insert the name of the neivspaper in which 
 the notice is to be 2Juhli8hed.~\ 
 
 And it shall be the duty of the Board of Directors, within one 
 month previous to the time of said election, to appoint three stock- 
 holders to be judges of said election, who shall hold and conduct the 
 same, and who shall, after the election has been held, certify, under 
 their hands, to the Cashier of this Bank, the result thereof, and the 
 names of the Directors elect. 
 
 Sec. 2. The Cashier, upon receiving the certificate of the judges 
 of the election as aforesaid, shall cause the same to be recorded 
 upon the minute book of the Bank, and shall notify the Directors 
 elect of their election, and of the time at which they are re(|uired 
 to meet at the banking house of this Bank, for the purpose of or- 
 ganizing a new board. If at the time fixed for the meeting of the 
 Directors elect, there should not be a quorum present, the members 
 present may adjourn, from time to time, until a quorum is obtained. 
 
 Sec. 3. If, for any cause, the annual election of Directors 
 should not be held on the second Tuesday of January, the Board 
 shall order the election to be held on some other day, of which 
 special election, notice shall be given, judges appointed, and returns 
 made, and Directors elect notified, according to the requirements and 
 provisions of Section 2 of these By-Laws. 
 (28) 
 
24 
 
 Officers. 
 
 Sec. 4. The officers of this Bank shall be a President, Cashier, 
 Teller, Book-keeper, and such other officers as may be from time 
 to time required for the prompt and orderly transaction of its 
 business. 
 
 Sec 5. The President shall hold his office (unless he shall resign, 
 or become disqualified, or be removed) for the current year for 
 which the Board, of which he shall be a member, was elected. 
 In case a vacancy in the Board of Directors or in the office of 
 President shall occur, during any current year, it shall be filled 
 by the Board. 
 
 Sec. G. The Cashier and the subordinate officers shall be appoint- 
 ed to hold their offices respectively during the pleasure of the 
 Board. 
 
 Sec. T. The Cashier of this Bank shall be responsible for all 
 the moneys, funds, and valuables of the Bank, and shall give bond, 
 with security, to be approved by the Board, in the penal sum of 
 
 dollars, conditioned for the faithful and honest discharge of 
 
 the duties as such Cashier, and that he will faithfully a{»ply and 
 account for all such moneys, funds, and valuables, and deliver the 
 same on proper demand to the order of the Board of Directors of 
 this Bank, or to the person or persons authorized to receive them. 
 
 Sec. 8. The President of this Bank shall be responsible for all 
 such sums of money and property of every kind as may be entrusted 
 to his care, or placed in his hands by the Board of Directors or by 
 
 the Cashier, and shall give bond in the penalty of dollars, with 
 
 security, to be approved by the Board, conditioned for the faithful 
 discharge of his duties as such President, and that he Avill faithfully 
 apply and account for all sums of money and other property of the 
 Bank that may come into his hands as such President, and pay 
 over and deliver the same to the order of the Board of Directors, 
 or to any other person or persons authorized to demand and receive 
 the same. 
 
 Sec. 9. The Teller shall be responsible ior all such sums of money, 
 property, and funds of every description as may, from time to time, 
 be placed in his hands, by the Cashier, or otherwise come into his 
 possession as Teller, and shall give b(uid, with security to be 
 approved by the Board, in the penalty (»f dollars, conditioned 
 
 
 25 
 
 for the honest and faithful discharge of his duties as Teller, and 
 that he will faithfully apply, account for, and pay over all moneys, 
 property, and funds of every description that may come into his 
 hands by virtue of his office as Teller, to the order of the Board of 
 Directors aforesaid, or to such person or persons as may be author- 
 ized to demand and receive the same. 
 
 Seal. 
 
 Sec. 10. The foUoAving is a description of the seal adopted 
 by the Board of this Bank. {Here insert a description of the seal.) 
 
 Coxveyaxce of Real Estate. 
 
 Sec. 11. All transfers and conveyances of real estate shall be 
 made by the Bank, and under tlie seal thereof, in accordance with 
 the orders of the Board, and shall be signed by the President or 
 Cashier. 
 
 Increase or Stock. 
 
 Sec. 12. Whenever an increase of stock shall be determined 
 upon, in accordance with the provisions of the Articles of Asso- 
 ciation of this Bank, it shall be the duty of the Board to notify 
 all the stockholders of the same, and to cause a subscription to be 
 opened for such increase of capital. In the increase of capital, 
 each stockholder shall have the privilege of subscribing for such 
 number of shares of the new stock as he may be entitled to sub- 
 scribe for, according to his existing stock in the bank. If any 
 stockholder should fail to subscribe for the amount of stock to 
 which he may be entitled, the Board of Directors may determine 
 what disposition shall be made of the privilege of subscribing for 
 the unsubscribed stock. 
 
 Bu.sim:.^,< of TJiE Bank. 
 
 o'clock 
 
 Sec. 13. The bank shall be open for business from — 
 
 a. m., to o'clock j>. M., of each day of the year, excepting 
 
 Sundays, and days recognized by the laws of this State as national 
 and religious holidays. There shall be a standing committee, to 
 be known as the Exchange Committee, consisting of the President, 
 Cashier, and one Director, appointed by the Board evcrv six 
 months, to continue to act until succeeded, who shall have power 
 
26 
 
 to discount bills, notes, and other evidences of debt, and to buy 
 and sell bills of exchange, and who shall, at each regular meeting 
 of the Board, make a report of the bills and notes purchased by 
 them since their last previous report. 
 
 Minutes. 
 
 Sec. 14. The Articles of Association of this Bank, and the 
 returns of the judges of the elections, shall be recorded in the 
 minute bock, in which shall also be recorded the proceedings of 
 the Board at all regular and special sessions. 
 
 The minutes of each meeting shall be signed by the President 
 and attested by the Cashier. 
 
 Transfers of Stock. 
 
 Sec. 15. The stock of this Bank shall l)e assignable only on the 
 books of this Bank, subject to the restrictions and provisions of 
 the act, and a transfer book shall be kept in which nil assign- 
 ments and transfers of stock shall be made. Transfers of stock 
 shall not be suspended preparatory to a declaration of dividends ; 
 and, except in cases of agreement to the contrary expressed in the 
 assignments, dividends shall be paid to the stockholders in whose 
 name the stock shall stand, on the day on which the dividends 
 are declared. 
 
 Sec. IG. Certificates of stock signed by the President and Cash- 
 ier may be issued to stockholders, and the certificate shall state 
 upon the face thereof that the stock is transferable only upon the 
 books of the Bank ; and when stock is transferred, the certificates 
 thereof shall be returned to the Bank and cancelled, and new 
 certificates issued. 
 
 Expenses. 
 
 All the current expenses of the Bank shall be paid by the 
 Cashier, who shall, every six months, or oftener, if required to do 
 so, make to the Board a detailed statement thereof. 
 
 Contracts. 
 
 Sec. it. All contracts, checks, draft:<, etc., shall be signed by 
 the President or Cashier. 
 
 J 
 
 > 
 
 r 
 
 A' 
 
 Examinations. 
 
 Sec. 18. There shall be appointed by the Board, every three 
 months, a committee, whose duty it shall be to examine into the 
 afiairs of the Bank, to count its cash, and compare its assets and 
 liabilities with the balances on the general ledger, for the purpose 
 of ascertaining whether or not the books are correctly kept, and 
 the condition of the Bank corresponds therewith, and whether or 
 not the Bank is in a sound and solvent condition ; the result of 
 which examination shall be reported to the Board at their next 
 regular meeting. 
 
 Meetings. 
 
 Sec. 19. The regular meetings of the Board shall be held on 
 the [Aerg insert time of meetings.~\ Special meetings may be called 
 by the President or Cashier. 
 
 Quorums. 
 
 Sec. 20. Two-thirds of the Directors, including the President, 
 shall be a quorum to do business. 
 
 Sec. 21. These By-Laws may be changed or amended by the 
 yote of two-thirds of the Directors. 
 
 Note, — The foregoing form of IJy-Laws are submitted to the consideration of 
 the Directors of National Banks. They will, of course, have to be modified to 
 suit the circumstances of different Banks, and the views of different Boards, but 
 are believed to contain, in general, such rules as are required for the manage- 
 ment of Banks. The bonds of officers should be drawn according to the tenure 
 of their offices, and should correspond with the terms of their appointment. 
 
t^ 
 
 ^mvcm 0f iht (^am^xoM of tht €\mm(^ 
 
 TO 
 
 Questions in relation to the National Currency Act. 
 
 TREASURY DEPARTMENT. 
 
 Office of Comptroller of the Curre^^cy, 
 
 Washington, July 14, 1863. 
 
 Most of the questions presented to the Comptroller, in regard 
 to the National Currency Act, have been answered in the forms 
 and instructions which have been sent from this office, and by let- 
 ters to the interrogators. There are a few, however, that can be 
 more conveniently^ and satisfactorily answered in this form than in 
 any other. 
 
 1st Question. Is there any "reasonable rloubt "' of the constitu- 
 tionality of this act ? 
 
 Ansiver. The constitutionality of the Act of Congress establish- 
 ing, in time of peace, a United States Bank, with power to locate 
 in the States, branches thereof, having been affirmatively decided 
 by the Supreme Court of the United States, the constitutionality of 
 the National Currency Act is not considered to be an open (juestion. 
 
 In ordinary times the constitutionality of this Act would hardly 
 be questioned ; but in the existing emergency of the Government, 
 engaged, as it is, in a war of gigantic proportions — with specie no 
 longer a circulating medium — with a large internal revenue to be 
 collected in the States and Territories, such a currency as is pro- 
 vided for in this Act is an absolute necessitv. To deny to the 
 Government, through such agencies as Congress might create, the 
 power to provide a currency based upon its own resources, would 
 be not only to deny its sovereignty, but its authority to perform 
 properly and safely its acknowledged functions. 
 (28) 
 
 ^ 
 
 \ 
 
 
 2d Question. What are stockholders of State Banks to gain by 
 discontinuing their present organizations, and organizing under the 
 national law 'i 
 
 Ansiver. The chief gain will be in a circulation of notes, which 
 cannot long be secured through the agency of State institutions. 
 Legal-tender notes have created a taste and prepared the way for 
 a National Bank Note circulation. These notes, in all sections of 
 the country, have a better credit and are in greater demand than 
 the notes of the strongest banks. Country bankers, uotwithstand- 
 ing the largeness of the issue, find it difficult to supply the call for 
 them, and are frequently under the necessity of ordering them, at 
 considerable expense, from commercial points, to meet the demand 
 that will not be satisfied with anything else. The preference for 
 these notes is not chiefly to be attributed to the fact that they are 
 a " legal tender, " but to the fact that they are Government money ^ 
 and must be good, if the Government is good. I do not say that 
 their general credit is not, in a measure^ owing to the fact that 
 they are declared to be '• lawful money, " or that it was not neces- 
 sary to make them so, to place them beyond the influences that 
 might, at the time, have been combined to depreciate them ; but I 
 do say, that the people, who control the currency, as they do the 
 legislation of the country, prefer legal tenders to bank notes, because 
 they are Government issues, are receiveable for Government dues, 
 and must, every dollar of them, be redeemed, if the Government is 
 maintained. 
 
 The National Bank Note circulation is intended gradually to 
 take the place of the direct issues of the Government. It is not 
 expected that it will, at once, have the credit that has been attained 
 by the "legal tenders, " nor that the notes of the National Associa- 
 tions, scattered from Maine to California, will be of absolutely 
 uniform value throughout the Union ; but it is expected that these 
 notes, sustained by the credit and secured by the resources of the 
 nation, receiveable for all public dues, except duties upon imports, 
 and in payment of all claims against the Government, and, in case 
 of the failure of the Banks, to be redeemed at the Treasury of the 
 United States, will challenge, to a greater degree, the public con- 
 fidence, and possess more uniformity of value than can be attained 
 by the issues of the best managed State institutions. I will go 
 further than this : through the instrumentality of Clearing Houses, 
 
/r 
 
 il 
 
 30 
 
 or Redeeming Agencies, which, in due time, may become a necessary 
 feature of the system, the notes of the National Banks, wherever 
 situated, will be as nearly of uniform value throughout the Union 
 
 ■ 
 
 as the commercial interests of the country will require. 
 
 There will not be, in my judgment, for any consideral)le time, 
 two systems of corporate banking (one State and the other National) 
 in the United States; not that there is a necessary antagonism 
 between the two systems, but because both will not be equally accep- 
 table to the people and equally profitable to the banker. One or 
 the other will fully occupy the field; and, aside from the manner 
 in which the National system is being regarded by the people, and 
 the rapidity with which National Associations are being formed, 
 it requires no spirit of prophecy to predict which of the two is 
 destined to give way. The losses which the people have sustained 
 by Bank failures ; the inadequate protection which State legisla- 
 tion, with rare exceptions, has given to the bill holders ; the fact 
 that the good credit of the issues of the strongest and best con- 
 ducted State Banks, outside of the States, or the section where 
 they exist, is not the result of public confidence in their scdvency, 
 but of the influence of bankers and money dealers, who can as 
 easily depress that credit as they can sustain it, and who do not 
 unfrcquently depress or sustain it, as suits their own interests or 
 convenience alone; that all the credit that State Banks have at a 
 distance from home, is artificial and unreliable ; all these things 
 have given rise to a wide-spread dissatisfaction with the existing 
 bank note circulation, and created a popular desire for a circula- 
 lation, of whose solvency there can be no question, and whose 
 credit will not be at the mercy of bank note brokers. 
 
 The Government of the United States is not to be overthrown 
 by the attempted secession of the Southern States, and the war in 
 which it is engaged. On the contrary, it will be vastly strength- 
 ened by the severe ordeal to which it is being subjected — strength- 
 ened by the evidence, which is every day being exhibited, of its 
 inherent power, and the conviction that is constantly spreading 
 and deepening in the minds of the people, that their personal 
 destinies are identified with it — strengthened by the very debt that 
 it is contracting, and the evidences of value that are to be based 
 upon this debt. 
 
 } 
 
 
 v 
 
 
 
 Banks whose issues are secured by the Government, and which 
 are to become the financial agents of the Government, will, in my 
 opinion, ere long, be the only ones that will be tolerated by the 
 people ; and if the Banks of the ohler and richer States continue, 
 as they have done, and are now to a large extent doing, to furnish 
 the iiewer and less wealthy States with a bank note circulation, 
 they will have to do it through the agency of National Banks. 
 In availing themselves of the privileges of the National Currency 
 Act, for loaning their capital and credit to the people of the new 
 States, they will have the satisfaction of knowing that while 
 adding to their own wealth, they arc strengthening the Govern- 
 ment, and creating a powerful influence against repudiation, 
 by aiding in furnishing to the people a circulation, secured by 
 the stocks, and representing the unity of the nation. 
 
 Aside from the matter of circulation the National Currencv Act 
 is as favorable to bankers as the banking laws of most of the 
 States. Should it prove to be too stringent, it is safe to expect 
 that such amendments will be made to it as will accommodate it 
 to the reasonable requirements of capitalists, and the wants of a 
 great and growing nation. 
 
 Question. Will State Banks be furnislied with the national 
 circulation, acconling to the provisions of the G^kl section of the 
 Act? 
 
 A7mver. This section is a part of the law, and must be obeyed. 
 I have hoped, however, that very few Banks would claim the 
 advantages of it. The engrafting upon a national system of bank- 
 ing of a provision that to some extent denationalizes it, was, in my 
 opinion, a great mistake. Nor can I understand how State Banks, 
 without the aid of State legislation, can avail themselves of the 
 provisions of this section without violating their charters, or the 
 laws under which they are incorporated. But if enabling acts, 
 authorizing State Banks to circulate the National Currency, have 
 been or should be passed by the Legislatures of the proper States, 
 I should still regret being compelled to furnish this currency to 
 institutions over which the Government can exercise no supervision 
 or control. I trust that few Banks will deposit bonds and claim 
 circulation under the 62d section, but that the stockolders of sol- 
 vent banks, who desire to connect themselves with the system, will 
 do so, by availing themselves of the privileges of the 61st section, 
 
32 
 
 or, what would be better still, by winding up their present State 
 institutions, and organizing new Associations, independent of the 
 old ones. The intention of the law was, to provide a national cir- 
 culation through the agency of National Banks, which should be 
 subject to Government supervision and control. Nothing would 
 be more sure to destroy the symmetry of the system, or be more 
 likely to bring it into disrepute, than a distribution among the 
 banking institutions of the States, (''good, bad, and indifferent,") 
 of the national currency. I must, however obey the law, and 
 unless prevented from doing so, by a judical decision or an author- 
 itative opinion, I shall furnish circulation under the section referred 
 to as soon as it can be provided. As notes will be first supplied 
 to Associations organized under the Act, it is not likely that State 
 Banks can be supplied, to any considerable extent, before the 
 early part of the next year. 
 
 Question. Is it expected that State Banks that may become 
 National Associations under the 61st section of the act will give 
 up their present corporate names ? 
 
 Ansiver. Before I entered upon the discharge of my duties as 
 Comptroller of the Currency, the Secretary of the Treasury, after 
 much consideration, had come to the conclusion, as a National 
 Currency was to be provided through the instrumentality of 
 National Banking Associations, that all such associations should 
 have a common name. Persons forming associations under the 
 Act have, therefore, been advised to take the names of First, 
 Second, Third, &c., National Banks of the places in which they 
 are established, according to the order of organization. This 
 rule is expected to be observed by State Banks that may be 
 converted into National Banks under the 01st section of the Act, 
 as well as by original associations. 
 
 If, in their new organizations, they desire to retain, in some 
 way their former corporate names, it must be done in such manner 
 as will not interfere with the symmetry of the circulation which is 
 to be furnished to them, nor render illegal their acts as National 
 Associations. All who connect themselves with this system have 
 a common interest in making it symmetrical and harmonious, as 
 well as national. The retention by State Banks of their present 
 corporate names, some of them long and differing from others 
 only in locality, would prevent this, and interfere with the unifor- 
 
 \ 
 
 33 
 
 mity which it is desirable to maintain in the national circulation. 
 I know with what tenacity and pride the managers of old and j 
 w^ell conducted Banks cling to the names which their ability and j 
 integrity have done so much to make honorable ; but I would 
 suggest to them that it w ill be an easy matter for them to transfer 
 to National Institutions the credit which they and their predeces- 
 sors have given to State Institutions ; that it is not the name of a 
 Bank, but the character of the men who conduct its affairs, and 
 the character of its securities, that give to it the confidence of the 
 public. 
 
 The Merchants' Bank of Boston "vvill not lose a particle of 
 credit by becoming the First National Bank of Boston : on the 
 contrary, its credit will bo improved by it. Nor would the stock 
 of the Chemical Bank of New^ York be a whit the less valuable, 
 nor w'ould its reputation be in the slightest degree lessened, by its 
 becoming the tenth or the fiftieth National Bank of New York. 
 
 H. McCULLOCII, 
 
 Comptroller. 
 
NOTES. 
 
 The United States Bonds held by the National Banks, and 
 that part of their capital invested in these Bonds, are, it is un- 
 derstood, exempt from national and State taxation. For the 
 amount of national tax to which they will be subject on their cir- 
 culation, and on their profits, and for license, reference is made 
 to the laws of Congress relating to the internal revenue. 
 
 The 19th section of the Act, as far am the amount of taxation is 
 regarded, is superseded by the 7th section of an Act to provide 
 ways and means for the support of the Government, approved 
 March 3d, 18()3. 
 
 Circulating notes of the highest style of engraving, and printed 
 on the best quality of paper, will be furnished to the National 
 Banks, at the expense of the Government, under the provisions of 
 the Act, at the earliest day practicable, and in the order in which 
 the Banks are organized. The notes will first be supplied to the 
 associations organized under the act ; and inasmuch as serious 
 doubts seem to be entertained in regard to the power of Congress 
 to enlarge or increase the privileges of corporations created by 
 State authority, it may be deemed best to have these doubts 
 removed by the opinion of the Attorney General, or the decision 
 of a competent Court, before the National Currency is furnished 
 to existing State Banks, under the 62d section of the Act. 
 
 It is important that organization or preliminary certificates of 
 the association should be carefully prepared and executed ; that 
 the names of stockholders should be written in full, and that there 
 should be no erasures or interlineations therein. It will be borne 
 in mind that these certificates are not subscription papers, and 
 
 (34) 
 
 i. f 
 
 y 
 
 ^X 
 
 35 
 
 o 
 
 while the parties to them must sign them with their own hands, 
 and acknowledge them in person, it is not necessary, nor exactly 
 proper, for them to enter their own names in their own hands in the 
 4th article. 
 
 The right of a partner to seal and acknowledge for a co-partner 
 is, at least questionable. It is therefore important, if partners 
 unite in the preliminary certificate for the organization of a National 
 Bank, that they should sign, seal and acknowledge the same indi- 
 vidually, and not as co-partners. It is also desirable that the same 
 rule should be observed in the Articles of Association. 
 
 Before circulating notes >\ill be delivered to any Bank organized 
 under the National General Banking Law, the Comptroller must 
 have satisfactory evidence, by the report of an examiner, or other- 
 wise — 
 
 1st. That the Bank is located in some city, town, or village 
 which is easily accessible, and not in some out of the way, inac- 
 cessible place, selected for the purpose of making the return 
 of its notes difficult or expensive. 
 
 2d. That the Bank is provided with a suitable banking room 
 or banking rooms, unconnected with any other business, and also 
 with a vault, or safe, for the safe keeping of its funds. 
 
 3d. That the Bank has procured such books as may be required 
 for the transaction of a regular banking business, one of said 
 books to be a record or minute book, in which shall have been 
 recorded its Articles of Association, copies of which shall have 
 been forwarded to this Department, and in which the proceed- 
 ings of the Board of Directors shall be entered and preserved. 
 
 4th. That the Bank shall have adopted By-Laws for the manage- 
 ment of its business, approved by the Comptroller. 
 
 5th. That the amount of its capital stock required to be paid 
 in, has been so paid, and that the same remains in Bank, in cash, 
 
; 
 
 36 
 
 or with some safe depositary, subject to sight check, or has been 
 invested in United States bonds, or in some other satisfactory 
 manner. 
 
 6th. That the Bank has in its employment competent officers for 
 the transaction of its business, that its Directors are m(ni of fair 
 standing, and that the Bank has been organized to carry on legiti- 
 mate banking. 
 
 The Comptroller will afford every aid and encouragement in his 
 power to Banks organized for the purpose of carrying into effect 
 the spirit and intention of the law, but will discountenance and 
 prevent, as far as practicable, all attempts to pervert the law 
 from its proper object, by establishing Banks upon fictitious capital, 
 which, by their inability to meet promptly their engagements, may, 
 at any time, bring the system into disrepute. 
 
 Under the late act of Congress, all communications addressed 
 to the Comptroller's Department must be prepaid. 
 
^732 C77 
 
 Cooke, Jay, & Co, 
 
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 under s^cr:larv Chasa»s bill. 
 
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END OF 
 TITLE