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HOUSE BILL

DIVISION OF EARNINGS

SEC. 7. That after the payment of all necessary expenses and taxes of a Federal reserve bank, the member banks shall be entitled to receive an annual dividend of five per centum on the paid-in capital stock, which dividend shall be cumulative. Onehalf of the net earnings, after the afor said dividend claims have been fully met, shall be paid into a surplus fund until such fund shall amount to twenty per centum of the paid-in capital stock of such bank, and of the remaining one-half sixty per centum shall be paid to the United States and forty per centum to the member banks in the ratio of their average balances with the Federal reserve bank for the preceding year. Whenever and so long as the surplus fund of a Federal reserve bank amounts to twenty per centum of the paid-in capital stock and the member banks shall have received the dividends at the rate of five per centum per annum hereinbefore provided for, sixty per centum of all excess earnings shall be paid to the United States and forty per centum to the member banks in proportion to their annual average balances with such Federal reserve bank;

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SECTION 7.

PASSED BY SENATE.

DIVISION OF EARNINGS.

SEC. 7. That-after the payment of After all necessary expenses and taxes of a Federal reserve bank have been paid or provided for, the member-banks stockholders shall be entitled to receive an annual dividend of five six per centum on the paid-in capital stock, which dividend shall be cumulative. Onehalf of the net earnings, after the aforesaid dividend claims have been fully met, shall be paid into a surplus fund until such fund shall amount to twenty forty per centum of the paid-in capital stock of such bank, and of the remaining onehalf sixty fifty per centum shall be paid to the United States and forty per-centum to the member banks in the ratio of their average balances with the Federal reserve bank-for the preceding year. Whenever and so long as the surplus fund of-a Federal-reser e-bank amounts to twenty per-centum of the paid-in capital steek and the member banks shall have received the dividends-at-the rate of five per centum per annum hereinbefore provided for, sixty per entum of all excess earnings shall be paid-to-the-United States and forty per centum to the member banks in proportion to their annual average balances with such Federal reserve bank; all as a franchise tax, and fifty per centum shall be paid to the United States, as a trustee for the benefit of depositors in all failed member banks in the United States, and failed member trust companies in the District of Columbia, the money to be kept in and losses from failures to be paid from it as a depositors' insurance fund under a division of the Treasury to be constituted and managed under such regulations as may be prescribed by the Secretary of the Treasury. Whenever the Secretary of the Treasury, out of said fund, shall pay any amounts due to depositors of failed member banks, the Secretary of the Treasury shall be subrogated to all the rights of said depositors, and in the settlement of the affairs of any such bank all dividends that would have been due to such depositors shall be paid to the Secretary of the Treasury, and the same shall be by him paid into and become a part of said depositors' insurance fund.

CONFERENCE AGREEMENT.

DIVISION OF EARNINGS.

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SEC. 7. After all necessary penses of a Federal reserve bank have been paid or provided for, the stockholders shall be entitled to receive an annual dividend of six per centum on the paid-in capital stock, which dividend shall be cumulative. [One-half of the net earnings, after] AFTER the aforesaid dividend claims have been fully met, [shall be paid into a surplus fund until such fund shall amount to forty per centum of the paid-in capital stock of such bank, and of the_remaining one-half fifty per centum ALL THE NET EARNINGS shall be paid to the United States

as a franchise tax, [and fifty per centum shall be paid to the United States, as a trustee for the benefit of depositors in all failed member banks in the United States, and failed member trust companies in the District of Columbia, the money to be kept in and losses from failures to be paid from it as a depositors' insurance fund under a division of the Treasury to be constituted and managed under such regulations as may be prescribed by the Secretary of the Treasury. Whenever the Secretary of the Treasury, out of said fund, shall pay any amounts due to depositors of failed member banks, the Secretary of the Treasury shall be subrogated to all the rights of said depositors and in the settlement of the affairs of any such bank all dividends that would have been due to such depositors shall be paid to the Secretary of the Treasury, and the same shall be by him paid into and become a part of said depositors' insurance fund] EXCEPT THAT ONE-HALF OF SUCH

NET EARNINGS SHALL BE PAID INTO

A SURPLUS FUND UNTIL IT SHALL

AMOUNT ΤΟ FORTY PER CENTUM

OF THE PAID-IN CAPITAL STOCK OF

SUCH BANK.

HOUSE BILL.

SECTION 7—Continued.

all

earnings derived by the United States from Federal reserve banks shall constitute a sinking fund to be held for the reduction of the outstanding bonded indebtedness of the United States, said reduction to be accomplished under regulations to be prescribed by the Secretary of the Treasury. Should a Federal reserve bank be dissolved or go into

liquidation, the surplus fund of said bank, after the payment of all debts and dividend requirements as hereinbefore provided for, shall be paid to and become the property of the United States.

Every Federal reserve bank incorporated under the terms of this Act and the capital stock therein held by member banks shall be exempt from Federal, State, and local taxation, except in respect to taxes upon real estate.

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SEC. 8. That any national banking association heretofore organized may upon application at any time within one year after the passage of this Act, and with the approval of the Comptroller of the Currency, be granted, as herein provided, all the rights, and be subject to all the liabilities, of national banking associations organized subsequent to the passage of this Act: Provided, That such application on the part of such associations shall be authorized by the consent in writing of stockholders owning not less than a majority of the capital stock of the association. Any national banking association now organized which shall not, within one year after the passage of this Act, become a national banking association under the provisions hereinbefore stated, or which shall fail to comply with any of the provisions of this Act applicable thereto, shall be dissolved; but such dissolution shall not take away or impair any remedy against such corporation, its stockholders or officers, for any liability or penalty which shall have previously been incurred.

PASSED BY SENATE.

All net earnings derived by the United States from Federal reserve banks shall eenstitute-a-sinking fund to be held for , in the discretion of the Secretary, be used to supplement the gold reserve held against outstanding United States notes, or shall be applied to the reduction of the outstanding bonded indebtedness of the United States said reduction to be accomplished under regulations to be prescribed by the Secretary of the Treasury. Should a Federal reserve bank be dissolved or go into liquidation, the surplus-fund of said bank any surplus remaining, after the payment of all debts, and dividend requirements as hereinbefore provided, for, and the par value of the stock, shall be paid to and become the property of the United States and shall be similarly applied.

Every Federal reserve bank incorporated under the terms of this Act and, the capital stock and surplus therein, held by member banks and the income derived therefrom shall be exempt from Federal, State, and local taxation, except in respect to taxes upon real estate.

SECTION 8.

The Senate proposed to eliminate this section of the House bill.

CONFERENCE AGREEMENT.

[All] THE net earnings derived by the United States from Federal reserve banks shall, in the discretion of the Secretary, be used to supplement the gold reserve held against outstanding United States notes, or shall be applied to the reduction of the outstanding bonded indebtedness of the United States under regulations to be prescribed by the Secretary of the Treasury. Should a Federal reserve bank be

dissolved or go into liquidation, any surplus remaining, after the payment of all debts, dividend requirements as hereinbefore provided, and the par value of the stock, shall be paid to and become the property of the United States and shall be similarly applied.

[Every] Federal reserve [bank] BANKS incorporated under the terms of this Act], INCLUDING the capital stock and surplus therein, and the income derived therefrom shall be exempt from Federal, State, and local taxation, except [in respeci to] taxes upon real estate.

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