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national dues, it cannot be questioned that in some similar degree the negotiation of national loans must be prejudiced and their value to the national finances diminished. This opinion is confirmed by observation and experience.
Impelled, therefore, by a profound sense of the present necessity of a national currency to the successful prosecution of the war against rebellion, and of its utility at all times in protecting labor, cheapening exchanges, facilitating travel, and increasing the safety of all business transactions; and at the same time unwilling to urge even salutary and necessary reforms in such a way as needlessly to disturb existing conditions or impair the value of existing investments of capital, the Secretary recommended, in two successive reports, the authorization of national banking associations, to which the capital of the corporations now issuing notes for circulation might be transferred, with advantage to the parties in interest as well as to the general public.
The sanction of Congress was given to these views at the last session; and the simple assurance thus given that, henceforth, the country is to have a national currency secured by a pledge of national bonds, and the belief that this currency will at no distant day take the place of the heterogeneous corporate currency which has hitherto filled the channels of circulation, at once inspired faith in the securities of the government, and more than any other one cause enabled the Secretary to provide for the prompt payment of the soldiers and the public creditors.
If the policy thus indicated shall be fairly and judiciously pursued, and proper measures adopted to induce the conversion, at the earliest practicable period, of the bank corporations of the States into national banking associations, and of the corporate circulation into national currency, the Secretary believes, and, as he thinks, not without good grounds, that all the money needed for prompt payment of troops, and for the most vigorous prosecution of the war, can be obtained by loans on reasonable terms; while all interest on debt, and all ordinary expenditures, and a considerable part also of the extraordinary expenditures caused by this war, will be met by the ordinary resources. Nor does he doubt that, through wise legislation, sustained by intelligent popular will, and supported by prudence and energy in civil and military administration, national currency can be so approximated in recognized value to coin, that a resumption of payments in specie can be brought about much sooner than even sanguine persons now permit themselves to hope.
The Secretary has already referred in general terms to the reports of the heads of the various bureaus and branches of administration in his department. A peculiar interest is felt at this time in their operations, and especially in the operation of those most recently brought into existence.
The Comptroller of the Currency reports the organization under the national banking act, prior to the 29th of November, of one hundred and thirty-four associations; all which, upon the suggestion of the Secretary, have adopted the name of National Banks, distinguished
by order of organization and by locality. These Banking Associations have been formed in seventeen States and the District of Columbia, and have an aggregate capital of $16,081,200. The great care and labor required for the preparation of suitable notes for the new national currency has delayed its issue beyond expectation; but the printing is now begun, and the several associations will be supplied with the amounts to which they are respectively entitled within a few weeks. Besides the associations reported as actually organized, there are many others in process of organization. There is hardly a State not controlled by the rebellion, and hardly a considerable city, in which a national banking association has not been organized, or is not being organized. Even New Orleans is not an exception to this statement.
Thus the great work of introducing a permanent national currency has been entered upon in a spirit and with an energy which promise perfect success. The Secretary thinks he risks nothing in saying that within the present year the benefits of the system will have so approved themselves to the sense and patriotism of the people, that it will be beyond the reach of successful assault.
The Comptroller has indicated some amendments to the law which the Secretary concurs with him in regarding as important to its sucAs among the most essential of these, the Secretary asks the special attention of Congress to the proposition for a uniform rate of interest, and the repeal of the section which connects the issues of national currency in any degree with State banks. The Secretary also recommends, as likely to be useful, a provision to be made by law for the deposit with national banks, and also with the Treasurer and Assistant Treasurers, at such rates of interest and for such periods of time as the Secretary may prescribe, of moneys paid into or invested under the orders of judicial courts. It is not impossible that in this way many millions would be placed in the treasury at moderate rates of interest.
Monthly returns are now required of many of the national banking associations, and should be required of all; and from them, as well as from the banks not organized under national legislation, should be required a fair contribution to the general burdens of the people. The Secretary refers to Congress the question, whether the duty on national currency and the deposits of national banking associations shall correspond with the duties on other circulation and deposits. He thinks that for the present, at least, some discrimination in favor of the national associations may be properly admitted in consideration of the indispensable importance of a national currency, not adapted only, like United States notes, to temporary emergencies, but permanent in its very nature, and adequate to all demands of business, and capable, at no distant period, of being made equal to and convertible into coin, and therefore its real representative and equivalent.
Currency bureau established.
Comptroller of the currency.
Term of office.
Comptroller to take oath within what time.
Oath and bond of deputy comptroller.
Not to be in
terested in any banking asso
Seal of currency bureau, and where to be kept.
Act of June 3, 1864 (The National Bank Act)
[13 Statutes at Large 99, Thirty-Eighth Congress, Chapter 106, 1st Session, Approved June 3, 1864, by Abraham Lincoln]
AN ACT TO PROVIDE A NATIONAL CURRENCY, SECURED BY A
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there shall be established in the treasury department a separate bureau, which shall be charged with the execution of this and all other laws that may be passed by congress respecting the issue and regulation of a national currency secured by United States bonds. The chief officer of the said bureau shall be denominated the comptroller of the currency, and shall be under the general direction of the Secretary of the Treasury. He shall be appointed by the President, on the recommendation of the Secretary of the Treasury, by and with the advice and consent of the Senate, and shall hold his office for the term of five years unless sooner removed by the President, upon reasons to be communicated by him to the Senate; he shall receive an annual salary of five thousand dollars; he shall have a competent deputy, appointed by the secretary, whose salary shall be two thousand five hundred dollars, and who shall possess the power and perform the duties attached by law to the office of comptroller during a vacancy in such office and during his absence or inability; he shall employ, from time to time, the necessary clerks to discharge such duties as he shall direct, which clerks shall be appointed and classified by the Secretary of the Treasury in the manner now provided by law. Within fifteen days from the time of notice of his appointment the comptroller shall take and subscribe the oath of office prescribed by the constitution and laws of the United States; and he shall give to the United States a bond in the penalty of one hundred thousand dollars, with not less than two responsible sureties, to be approved by the Secretary of the Treasury, conditioned for the faithful discharge of the duties of his office. The deputy-comptroller so appointed shall also take the oath of office prescribed by the constitution and laws of the United States, and shall give a like bond in the penalty of fifty thousand dollars. The comptroller and deputy-comptroller shall not, either directly or indirectly, be interested in any association issuing national currency under the provisions of this
SEC. 2. And be it further enacted, That the comptroller of the currency, with the approval of the Secretary of the Treasury, shall devise a seal, with suitable inscriptions, for his office, a description of which, with a certificate of
approval by the Secretary of the Treasury, shall be filed in the office of the Secretary of State with an impression thereof, which shall thereupon become the seal of office of the comptroller of the currency, and the same may be renewed when necessary. Every certificate, assignment, Certain papers and conveyance executed by the comptroller, in pursuance to be evidence. of any authority conferred on him by law, and sealed with his seal of office, shall be received in evidence in all places and courts whatsoever; and all copies of papers in the office of the comptroller, certified by him and authenticated by the said seal, shall in all cases be evidence equally and in like manner as the original. An impression of such seal directly on the paper shall be as valid as if made on wax or wafer.
may be upon paper.
Rooms for cur
SEC. 3. And be it further enacted, That there shall be assigned to the comptroller of the currency by the Secretary of the Treasury suitable rooms in the treasury building for conducting the business of the currency bureau, in which shall be safe and secure fire-proof vaults, vaults. in which it shall be the duty of the comptroller to deposit and safely keep all the plates not necessarily in the possession of engravers or printers, and other valuable things belonging to his department; and the comptroller shall from time to time furnish the necessary furniture, stationery, fuel, lights, and other proper conveniences for the transaction of the said business.
SEC. 4. And be it further enacted, That the term States Bonds" "United States Bonds," as used in this act, shall be construed to mean all registered bonds now issued, or that may hereafter be issued, on the faith of the United States by the Secretary of the Treasury in pursuance of law.
Banking associations, how
SEC. 5. And be it further enacted, That associations for carrying on the business of banking may be formed by may be formed. any number of persons, not less in any case than five, who shall enter into articles of association, which shall specify in general terms the object for which the association is formed, and may contain any other provisions, not inconsistent with the provisions of this act, which the association may see fit to adopt for the regulation of the business of the association and the conduct of its affairs, which said articles shall be signed by the persons uniting to form the association, and a copy of them forwarded to the comptroller of the currency, to be filed and preserved in his office.
SEC. 6. And be it further enacted, That the persons uniting to from such an association shall, under their specify, hands, make an organization certificate, which shall specify
First. The name assumed by such association, which name, name shall be subject to the approval of the comptroller.
Second. The place where its operations of discount and place of busideposit are to be carried on, designating the state, territory, or district, and also the particular county and city, town, or village.
capital and shares,
names, &c., of shareholders.
purpose of certificate.
Certificate to be acknowledged.
seal to be evidence.
Amount of capital to be not less than, &c.
Associations when to be corporations and when to commence business.
May continue twenty years, unless, &c.
Directors and officers.
Third. The amount of its capital stock, and the number of shares into which the same shall be divided.
Fourth. The names and places of residence of the shareholders, and the number of shares held by each of them.
Fifth. A declaration that said certificate is made to enable such persons to avail themselves of the advantages of this act.
The said certificate shall be acknowledged before a judge of some court of record or a notary public, and such certificate, with the acknowledgment thereof authenticated by the seal of such court or notary, shall be transmitted to the comptroller of the currency, who shall record and carefully preserve the same in his office. Copies of such certificate, duly certified by the comptroller, and authenticated by his seal of office, shall be legal and sufficient evidence in all courts and places within the United States, or the jurisdiction of the government thereof, of the existence of such association, and of every other matter or thing which could be proved by the production of the original certificate.
SEC. 7. And be it further enacted, That no association shall be organized under this act, with a less capital than one hundred thousand dollars, nor in a city whose population exceeds fifty thousand persons, with a less capital than two hundred thousand dollars: Provided, That banks with a capital of not less than fifty thousand dollars may, with the approval of the Secretary of the Treasury, be organized in any place the population of which does not exceed six thousand inhabitants.
SEC. 8. And be it further enacted, That every association formed pursuant to the provisions of this act shall, from the date of the execution of its organization certificate, be a body corporate, but shall transact no business except such as may be incidental to its organization and necessarily preliminary, until authorized by the comptroller of the currency to commence the business of banking. Such association shall have power to adopt a corporate seal, and shall have succession by the name designated in its organization certificate, for the period of twenty years from its organization, unless sooner dissolved according to the provisions of its articles of association, or by the act of its shareholders owning two thirds of its stock, or unless the franchise shall be forfeited by a violation of this act; by such name it may make contracts, sue and be sued, complain and defend, in any court of law and equity as fully as natural persons; it may elect or appoint directors, and by its board of directors appoint a president, vice-president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss said officers or any of them at pleasure, and appoint others to fill their places, and exercise under this act all such incidental powers as