wholly paid up and unimpaired, be entitled to receive from the Comptrollers of the Currency national bank notes or national currency notes, or both, of the different denominations hereinafter specified (none, however, being less than ten dollars) in blank, registered and countersigned, as provided by law, to the amounts and in the manner following, and on the following terms and conditions, but in no case exceeding in the sum of its bank notes and currency notes the amount of such paid-up and unimpaired capital:

Subdivision A. That any national banking association National may deposit with the Treasurer of the United States, under serve notes. such regulations as the Secretary of the Treasury may approve, United States notes to an amount not exceeding its paid-up and unimpaired capital, and shall then be entitled to receive in exchange therefor from the Comptrollers of the Currency an equal amount of national reserve notes, of the kind and denominations described in sections twelve and fifteen of this Act.

United States notes received into the division of issue and redemption in exchange for national reserve notes shall be canceled as received.

notes.

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Subdivision B. That upon the deposit by any national National bank banking association of United States bonds, bearing interest, as provided by law under the provisions of sections fifty-one hundred and fifty-nine and fifty-one hundred and sixty of the Revised Statutes, as amended by the acts of June twentieth, eighteen hundred and seventy-four, and July twelfth, eighteen hundred and eighty-two, it shall be entitled to receive from the Comptrollers of the Currency national bank notes of different denominations in blank, as provided by this act, equal in amount to the par value of the bonds so deposited; and any national banking associ ation now having bonds on deposit for the security of circulating notes less in amount than the par value of the bonds, or which may hereafter have such bonds on deposit, shall be entitled to receive, immediately upon its reorganization under this act, national bank notes to an amount which shall increase to the par value of the bonds the aggregate amount of circulating notes held by such association in consequence of the deposit of such bonds: Provided, That nothing herein contained shall be construed to modify or repeal the provisions of sections fifty-one hundred and sixty-seven and fifty-one hundred and seventy-one of the Revised Statutes, authorizing the requirement of additional deposits of bonds or of lawful money in case the market value of the bonds held to secure the circulating notes shall fall below the par value of the national bank notes outstanding for which said bonds may be deposited as security.

Subdivision C. That any national banking association, having deposited with the Treasurer of the United States United States notes and received in exchange therefor national reserve notes, shall be entitled to receive and issue, in addition thereto, an amount of national currency notes equal to the amount of national reserve notes received as aforesaid: Provided, however, That the amount of national currency notes thus issued shall not exceed the

National currency notes.

National currency notes para

assets.

amount of its national bank notes outstanding: And provided further, That the notes thus issued shall not exceed forty per centum of the paid-up and unimpaired capital of the bank, but an additional amount of national currency notes may be issued subject to the tax on circulation provided in section twenty-nine of this act, without any increase of the circulation secured by United States bonds and without taking out any additional reserve notes.

SEC. 14. That the national currency notes shall constimount lien on all tute a paramount lien upon all the assets of the association issuing such notes, after sufficient proceeds thereof shall have been applied to redeem in full the outstanding national-bank notes.

notes.

Description of SEC. 15. That in order to furnish suitable notes for circulating the Comptrollers of the Currency shall cause plates and dies to be engraved, in the best manner to guard against counterfeiting and fraudulent alterations, and shall have printed therefrom and numbered such quantity of circulating notes in blank of the denominations of ten dollars, twenty dollars, fifty dollars, one hundred dollars, five hundred dollars, one thousand dollars, and ten thousand dollars as may be required to supply the associations entitled to receive the same.

Legal status of

notes.

Each national reserve note shall be in the same form and contain the same statements as the present United States legal tender notes, and in addition thereto shall express upon its back or reverse side the promise of the national banking association receiving the same to pay at the office of said bank, on demand, in gold coin, the sum specified on its face, which statement shall be attested by the signatures of the president or vice-president and cashier of such association.

Each national bank note shall conform as nearly as practicable, subject to the provisions of this Act, with the national bank notes issued prior to the passage of this Act, except that it shall express the promise of the association to pay it, upon presentation at the office at which it was issued, in gold coin of the United States or national reserve notes.

Each national currency note shall express upon its face the promise of the association receiving and issuing the same to pay, upon presentation at its office, the specified amount on demand, in gold coin of the United States or national reserve notes, attested by the signatures of the president or vice president and the cashier or assistant cashier of such association; it shall also bear upon its face the statement that it is issued in accordance with the provisions of this Act, which statement shall be attested by the written or engraved signature of the First Comptroller of the Currency, and shall bear such devices and other statements and be in such form as the Comptrollers of the Currency shall, by regulation, direct.

No circulating notes shall be issued to or by any national banking association other than those described in this Act. SEC. 16. That national reserve notes issued to any national banking association, as defined in this Act, shall

be a full legal tender at their face value for all debts, public and private, except duties on imports and interest on the public debt, and shall be available for use in the reserves of any national banking association.

Every national banking association formed or existing under this Act shall take and receive at par national bank notes or national currency notes issued by any lawfully organized national banking association.

No national banking association shall count or report any of its own national bank notes or national currency notes as a part of its cash or cash assets.

quired.

of

SEC. 17. That each year after the expiration of four years Reduction from the passage of this Act the Comptrollers of the Cur- bond deposits rerency may, from time to time, and under regulations to be prescribed by them, reduce the amount of the United States bonds required to be deposited under the provisions of this Act by one-fourth of the amount so required, and from and after the expiration of eight years from the passage of this Act no such bond deposits shall be required; and any national banking association having at any time bonds of the United States deposited with the Treasurer in excess of the amount required by law to be at such time deposited may withdraw the whole or any part of such excess: Provided, however, That such decrease in the amount of bonds required to be deposited shall not of itself in any way interfere with the amount of circulating notes previously issued by said banking association: And provided further, That nothing herein contained shall be construed to authorize or permit the withdrawal of bonds required to be deposited under the provisions of section fifty-one hundred and fifty-three of the Revised Statutes of the United States as security for the safe-keeping and prompt payment of the public moneys deposited with any national banking associations.

SEC. 18. That no national banking association which Bonds required during eight shall be organized within eight years after the passage of years. this act shall be required, preliminary to commencing business, to deposit any greater amount of United States bonds than it would then be required to have on deposit if it had been organized immediately after the passage of this act.

finally

without

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SEC. 19. That after so many United States notes have Currency notes been canceled and destroyed, as herein provided, that in taking out the judgment of the Comptrollers of the Currency no more serve notes. of such notes are available for use as a basis for the issue of circulating notes, the deposit of such United States notes as provided in section thirteen of this act shall no longer be required; but the Comptrollers may require any national banking association thereafter organized to obtain from the division of issue and redemption reserve notes in the manner provided in section twenty of this act. When in the judgment of the Comptrollers no more national reserve notes are available for such use, the taking out of such reserve notes, as provided in sections thirteen and forty of this act, shall no longer be required, and national banking associations shall then be entitled to receive B & C -6

and

tion of reserve notes.

national currency notes to the amount which they would have been entitled to receive if such United States notes or reserve notes were available for such use.

Withdrawal SEC. 20. That the Comptrollers of the Currency may from redistribu: time to time, under regulations to be prescribed by them, withdraw from circulation national reserve notes; but such withdrawals shall be first from those banks having such reserve notes in excess of forty per centum of their capital. Thereafter such withdrawals shall be so made as to equitably adjust the respective holdings of national reserve notes of the several banks. The national reserve notes so withdrawn shall be canceled and destroyed; but the Comptrollers of the Currency are hereby authorized to issue, in exchange for gold coin, to national banking associations, now existing or hereafter organized, national reserve notes to an amount not exceeding in the aggregate the amount of national reserve notes so canceled and destroyed.

Whenever there shall be any funds in the Treasury available as surplus revenue, the Secretary of the Treasury may transfer the same to the division of issue and redemption, and if there are no United States notes or Treasury notes in the division of issue and redemption subject to cancellation, the Comptrollers of the Currency shall thereupon withdraw national reserve notes and cancel and destroy the same in the manner and to the amount that they would have canceled United States notes under the provisions of this act. National reserve notes so withdrawn and canceled shall not be reissued as provided in the preceding paragraph: Provided, That any decrease in the amount of reserve notes consequent on the withdrawal provided for in this section shall not of itself interfere with the amount of circulating notes to which any banking association would otherwise be entitled.

SEC. 21. That any national banking association desiring to reduce the volume of its national-bank notes or currency notes may do so by depositing with the assistant treasurer in charge of the division of issue and redemption a sum in gold coin equal to the amount of the reduction desired, or by redeeming its notes and sending such redeemed notes to the Comptrollers of the Currency, with the request that they be canceled; and the First Comptroller of the Currency may carry to the credit of any national banking association, or reimburse to it, the excess of either the bank-note redemption fund or the bank-note guaranty fund, or both, above the amount required by this act to be held against outstanding circulation.

SEC. 22. That the said Comptrollers of the Currency shall divide the United States into clearing-house districts, and each national banking association organized under this act which shall have taken out for issue any national currency notes shall belong distinctively to some one clearinghouse district; and the number of such district shall be plainly and prominently printed upon the said national currency notes issued by it.

Every association located outside of a clearing-house city shall arrange with some national banking association

in the clearing-house city of the district to which it belongs for the current redemption of its national currency notes.

fund.

No national banking association shall pay out over its own counter any of the national currency notes issued by national banking associations belonging to clearing-house districts other than its own, unless the association issuing the same shall have established an agency for the redemption of its notes in the clearing-house city of said district. SEC. 23. That every national banking association shall Guaranty at all times keep and have on deposit with the division of issue and redemption for the purpose hereinafter specified a sum in gold coin equal to five per centum of its outstanding circulation of national currency notes. The amount so kept on deposit shall constitute a fund to be known as the "guaranty fund," which fund shall be held for the following purpose, and for no other, namely:

Whenever the Comptrollers of the Currency shall have become satisfied by the protest or the waiver and admission specified in section fifty-two hundred and twenty-six, or by the report provided for in section fifty-two hundred and twenty-seven, of the Revised Statutes of the United States, that any association has refused to pay any of its circulating notes on demand, they shall direct the redemption of its national currency notes from the guaranty fund aforesaid, and the redemption in gold coin of the United States from the reserve fund in the division of issue and redemption of the national reserve notes issued to it. After the failure of any national banking association to redeem any of said notes shall have been thus ascertained the bonds deposited by it with the Treasurer of the United States shall be sold as provided by law, and the proceeds of such sale shall be applied first to the redemption of the notes for which they are held, and the balance, if any, shall be paid into the guaranty fund, so far as may be necessary to provide for the final redemption of any other outstanding notes of such bank.

The comptrollers of the currency shall forthwith collect, for the benefit of said guaranty fund, from the assets of the bank and from the stockholders thereof, according to their liability as declared by this act, such sum as, with the bank's balance in the guaranty fund as aforesaid, shall equal the amount of its national currency notes outstanding. And for this purpose the United States shall, on behalf of the guaranty fund, have a paramount lien upon all the assets of the association; and such fund shall be made good out of such assets in preference to any and all other claims whatsoever, except the necessary costs and expenses of administering the same.

All national reserve notes so redeemed shall be canceled and destroyed, and all national bank notes and national currency notes so redeemed shall be held by the Treasury Department in the division of issue and redemption until the conclusion of the proceedings of liquidation of said bank, and shall thereupon be canceled and destroyed.

The provisions of sections fifty-two hundred and twentysix, fifty-two hundred and twenty-seven, fifty-two hundred