FINANCES OF THE UNITED STATES. 



305 



Brought forward $2,078,711,819 68 



Due to other national banks 194,491,260 60 



Due to State banks and bankers 77,031,165 82 



Notes and bills rediscounted 6,708,164 45 



Bills payable 8,856,056 54 



Total $1^360,793,467 09 



Soon after the beginning of the first session 

 of the Forty-seventh Congress, a bill was intro- 

 duced, providing for the extension of the cor- 

 porate existence of national banks, embodying 

 the recommendations of the Comptroller of 

 the Currency. It was subsequently reported to 

 the House by the Committee on Banking and 

 Currency, with several important amendments, 

 and after a lengthy discussion passed May 30, 

 1882. The bill was amended in the Senate in 

 many particulars, and passed that body June 

 22d, by a vote of 34 to 14, and was subse- 

 quently passed in the House July 10th. Upon 

 the report of the conference committee the 

 vote was yeas 110, nays 79, not voting 101, 

 and the bill was approved by the President 

 July 12, 1882. 



The first three sections exhibit the method 

 of procedure by which national banks whose 

 periods of succession are about -to expire can 

 extend their charters. In brief, any such bank 

 can, within two years previous to the date at 

 which its corporate existence would otherwise 

 terminate, by the vote of shareholders own- 

 ing not less than two thirds of its capital stock, 

 extend its corporate existence for twenty years 

 from the date of the expiration of its original 

 period of succession, and its legal status as a 

 corporation is the same as if at the time of 

 its original organization it had had a char- 

 tered period of forty years instead of twenty 

 years. 



Section 4 makes this view clear, enacting 

 that the association shall preserve its identity, 

 and be the same after extension as before. 



The proviso in this section changes the law 

 before in force, as to the jurisdiction of courts 

 in suits by or against national banking associa- 

 tions. Under the old law national banks had 

 both in suits by and against them certain rights 

 granted by statute which placed them upon a 

 different footing from State or private banks 

 and bankers located in the same places ; but 

 this proviso places national banks in all suits 

 by or against them upon the same footing as 

 other banks and bankers, except as to suits be- 

 tween them and the United States, or its offi- 

 cers and agents. 



Section 5 provides how any stockholder not 

 assenting to the extension of the corporate 

 existence of the bank in which he holds stock, 

 may withdraw from such bank and secure the 

 value of his stock. It also contains a further 

 proviso modifying previously existing law as to 

 the organization of new associations. Prior to 

 the passage of this act, the stockholders of a 

 national bank which had been placed in volun- 

 tary liquidation, could under a decision of the 

 Attorney-General organize a new bank, taking 

 the name of the one previously closed. 

 VOL. xxii. 20 A 



This can only be done under the present law 

 by the unanimous consent of the stockholders 

 of the bank previously closed; the object of 

 this is to prevent the disregard of the rights 

 of any of the stockholders. The provisions 

 of section 6 relate to the retirement and issue 

 of circulating notes to extended national banks. 

 The design of this section is to cause all notes 

 issued by banks after their extension to be of 

 a new design easily distinguished from notes 

 issued previous to extension, so that the latter 

 may be called in and destroyed. 



For the first three years after extension, as 

 the notes of old design are redeemed, notes of 

 the new design are issued to the bank; after 

 three years have elapsed, the bank is required 

 to deposit lawful money to retire such of the 

 notes of old design as have not yet been pre- 

 sented for redemption. It is especially enacted 

 that all gains which may be derived from bank- 

 notes lost and destroyed shall accrue to the 

 Government. Virtually this was the case be- 

 fore, but a specific provision now places the 

 matter beyond controversy. By the same sec- 

 tion, the provision that the expense of prepar- 

 ing plates for new circulating notes shall be 

 borne by the banks, which had been the rule 

 before, is made applicable to extending banks. 



Section 7 obviates some difficulties which 

 would have been encountered by banks, the 

 corporate existence of which might expire with- 

 out their stockholders having taken any action 

 for their extension. Under the previous law 

 as interpreted by the United States Supreme 

 Court, there was reason to believe that a na- 

 tional bank after its period of succession had 

 expired, was no longer a corporation, was le- 

 gally dead, could not sue or be sued. 



Under this view, the affairs of a bank in such 

 a condition would have been left in great con- 

 fusion. Its directors could not act, its prop- 

 erty could not be sold, nor could it collect 

 amounts due from its debtors. Its affairs would 

 have been thrown into a condition which could 

 only be arranged by a court of equity, or per- 

 haps by the courts under State statutes. This 

 section provides for a continuation of the fran- 

 chise of expiring national banking associations 

 which do not extend until such time as their 

 affairs are finally liquidated. Under the old 

 law, any bank, without regard to capital, could 

 be authorized to commence business, or to con- 

 tinue to do business, upon a deposit of $50,000 

 in bonds, without regard to the capital stock. 



Thus, a bank with a capital of $50,000 was 

 required to deposit $50,000 in bonds, and a 

 bank with a capital of $500,000 was required 

 to do no more. 



Under section 8, banks with a capital of 

 $150,000, or less, can now do business upon a 

 deposit of bonds equal to a quarter of their 

 capital. Thus, a bank of $50,000 is required 

 to deposit $12,500 in bonds; of $150,000 capi- 

 tal, $37,500 in bonds. Above $150,000 capital, 

 $50,000 in bonds is still the minimum required. 

 This section also provides that the amount of 



