frsbog_mim_v34_0450.pdf

7/17/2019 frsbog_mim_v34_0450.pdf

http://slidepdf.com/reader/full/frsbogmimv340450pdf 1/48

X-6875

DIGEST OF STATE LAWS RELATING 10 MEMBERSHIP 07 STATE

BANKS AND TRUST COMPANIES IN FEDERAL RESERVE SYSTEM

ASP RESERVES REQUIRED OF SUCH EMBERS.

(Final draft)

The following digest was prepared in the o f f i c e o f

th e General Counsel to the Federal Reserve Board, with the

assistance of the Counsel f o r t h e various Federal reserve

banks, at the request of the Committee on Bank Reserves of the

Federal Reserve System.

The

digest shows

th e

provisions

o f

the

State laws permitting banks

and

trust companies

to

join

th e Federal Reserve System and authorizing member banks and

trust companies to maintain the reserves required by the Fed-

eral Reserve Act in l i e u o f those required by the State law;

and

where

th e

provisions

on

either

of

these joints have been

amended,

the

digest also shows

th e

original provisions

and

th e dates of and changes effected b y a l l amendments.

7/17/2019 frsbog_mim_v34_0450.pdf


X-687

ALABAMA.

A

Banks

a n d

t r u s t coi-:oani<9B x Wmi t t e d

t o

become metnbers

b f

Federal Reserve

•», - • •» • - • • ' • •

System;

An a c t o f t h e L e g i s l a t u r e of Alabama approved on September 17,

1 9 1 9 , p rov ides tha t a n y Sta te bank o r t r u s t company " s h a l l have t h e

power t o su b sc r ib e t o t h e cap i ta l s tock a n d become a member of a Fed-

eral reserve bank * * * . (Laws of 191 9 , Ac t approved September 17 , 1919 ,

s e c . 1 ; Civil Code, s e c . 6 4 1 6 ; Banking Law Pamphlet, 1 9 2 8 , s e c . 6 4 1 6 ,

p . 4 5 . )

Conwliance with Federal Reserve A ct reserve requirements accented a s

compliance with State la w requirements .

The Ac t o f September 1 7 , 1 9 1 9 , a l so p rov ides tha t a member

bank o r t r u s t company " s h a l l keep an d main ta in a s a l a wfu l r e se rv e t h e

same reserves a s a r e r e q u i r e d b y t h e Federal Reserve Ac t an d th e

amendments thereto o f other banks members o f t h e Federal Reserve S y s -

t em, and a compliance by such bank o r trust company o f th i s S ta te wi th

t h e

rese rve requ i rements

o f t h e

Federal Reserve

A ct

s h a l l

b e

h e ld

t o

b e a

f u l l compliance with

t h e

p ro v i s io n s

o f t h e

laws

of

t h i s S t a t e

o n t h e

su b je c t

o f

b*nk rese rves ,

a n d

such bank

o r

t r u s t company sh al l

n o t b e

r e q u i r e d

t o

carry reserves other than such

a s a r e

required under

t h e terms o f t h e Federal Reserve" A c t a n d i t s amendments. " (Laws o f

1 9 1 9 , A c t approved September 1 7 , 1 9 1 9 , s e c . 1 ; Civil Code, s e c . 5 4 1 8 ;

Banking Law Pamphlet , 1 9 2 8 , s e c . 5 4 1 8 , p . 4 6 . )

ARIZONA.

Bank o r t r u s t company aut hor iz ed t o "become member o f Federal Reserve

System.

On March 1 8 , 1 9 1 9 , a n a c t o f t h e L e g i s l a t u r e o f t h i s S t a t e was

approved i n which i t was provided "That a n y bank o r trust company i n -

corporated under

t h e

laws

of

th i s S ta te sha l l have

t h e

oower

t o

subscr ibe

t o t h e

c a p i t a l s t o c k

a n d

become

a

member

o f a

Federal Reserve Bank."

(Laws of 1 919 , Ac t approved March 1 8 , 1 9 1 9 , c h . 9 9 , s e c . 2 . )

I n 1 9 2 2 , t h e Leg is la tu re enac ted a new Code o f t h e banking

laws o f t h i s S t a t e and a provision covering membership i n t h e Federal

Reserve System substant ia l ly t h e aame a s t h e 1 9 19 p r o v i s i o n i s included

i n t h e Code. The new Code provides "That a n y bank o r trust company

incorpora ted under

t h e

laws

o f

th i s S ta te sha l l have

t h e

power

t o s u b -

s c r i b e t o t h e c a p i t a l s t o ck a n d become a member o f t h e Federal Reserve

System created a n d organized under an Act of Congress o f t h e United

S t a t e s a n d known a s t h e Federal Reserve A c t . (Session Laws of 1 92 2,

c h . 3 1 , s e c . 7 2 ; Gen era l Bank ing Laws, 1 9 2 2 , s e c . 7 2 , p . 4 7 . )

7/17/2019 frsbog_mim_v34_0450.pdf


— 2 —

X-6875 4 5 2

Comgliance with Federal Reserve A c t reserve requirements accepted a s •

compliance with State law requirements*

T h e a c t approved March 18 , 1919 , also provided that a compliance

b y a member bank o r t r u s t company "wi th t h e reserve requirements o f

t h e Federal Reserve A c t , s h a l l b e he ld to be a full compliance with

those provis ions o f t h e laws of th i s St at e which re qu ir e banks o r

trust companies

t o

maintain cash balances

i n

t he i r vau l t s

o r

with

other banks,

and no

such bank

o r


b e

r equ i r ed

to

ca r ry o r maintain reserve other than such a s i s required under t h e

terms o f t h e Federal Reserve A c t . (Laws of 1 919 , Act approved March

1 8 , 1 9 1 9 , c h . 9 9 , s e c . 4 . )

The new 1922

Banking Code also su bs ta nt ia l l y in cor por at-

es t he 1919 prov is ion s permi t t ing a compliance with t h e reserv- r e -

quirements o f t h e Federal Reserve Act in l i e u o f t h e requirements o f

Sta t e l a w . I n this connect ion, the new Code pr ovi de s t h at Any

such bank

o r

t r u s t company sha l l comply wi th

t h e

reserve reouiram

n t s

o f t h e Federal Reserve A c t a n d i t s amendments, a n d t h e comnli u.ce r f

such bank o r t r u s t company the rew it h sh al l be in l i e u o f , a n d ;:,hall

relievo such bank o r trust company from compliance with t h e orovis ions

o f t h e laws o f t h i s S ta t e r e l a t i n g t o t h e maintenance o f r e se rves . "

(Seaeion Laws of 1922 , ch . 31 , sec . 74 ; General Banking la ws , 1922 ,

s e c . 7 4 , p . 4 7 . )

A re vi se d code o f t h e laws of Arizona was publ i shed in 19?8 ,

a n d t h e membership a n d rese rve provis ions s e t forth above have been

incorporated into o n e s ec t i on of th i s code. This se ct io n pro vid es th at :

A ny bank may subscr ibe t o t h e cap i ta l s tock and become a member of t h e

fe de ra l res erv e system cre ate d a n d organized under a n a c t o f congress o f

t h e Uni ted S ta tes a n d known a s t h e federa l rese rve a c t . T he compliance

of such bank wi th t h e reserve requirements of s a id a c t s h a l l b e i n l i eu

o f • a n d

shall relieve such bank from compliance with

t h e

p rov i s ions

of

t h e

laws

of

t h i s s t a t e r e l a t i n g

t o t h e

maintenance

o f

r e s e r v e s .

The

super in tendent

may * * *.

(Sees.

7 2 , 7 4 - 5 , i . d .

cons,

a

re v. )" (Revis-

ed

Code

o f

Arizona,

1 9 2 8 , s e c . 2 6 8 . )

The revised code also provides that t h e term bank sh al l i n -

clu de commercial ban ks, sav in gs bank and trust companies * * * . (Re-

vised Code o f Arizona, 1 9 2 8 , s e c . 2 0 9 . )

arkansas .

Banks

an d

trust companies

may own

s tock

i n

Federal Reserve Bank.

An a c t of March 22 , 1 919 , o f t he L e g i s l a t u r e o f th i s S ta te

pro vid es th at St ate banks a n d trust companies may own such amount of

s tock i n a Federal Reserve Bank a s may b e requi red b y t h e Federal R e-

serve

A ct f o r a l l

banks, trust companies

o r

savings banks becoming

members th er eo f. " (Acts

of 1919, Act of

March

22 , 1919 , Ac t 339 , p .

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

- 3 -

25 1, s e c , 3; Ci & M» Diges t , 1 9 2 6 , s e c , 740$ Banking Law Pamphlet,

1 9 2 9 , s e c . 1 0 0 , p . 7 5 * )

Compliance with Federal Reserve A ct requirements held compliance

wi th S t a t e la w requirements .

The Act of March 2 2 , 1 9 1 9 , al so pro vi de s t h a t member banks

a n d trust companies "shall keep a n d main ta in a s a lawfu l rese rve ,

t h e same reserves a s a r e r e q u i r e d o f other bank members o f t h e Fett-

e r a l Reserve System" an d such a compliance b y member banks a n d t r u s t

companies "shall

b e

h e ld

to be a

f u l l compliance wit h

t h e

p ro v i s io n s

o f t h e

laws

o f

t h i s S t a t e

o n t h e

su b je c t

o f

bank re se rv es ." (Acts

of 1919 , Ac t o f

March

22 , 191 9 , Ac t 339 , p . 251 , s e c . 1 ; C . & M,

Diges t , 1 9 2 6 , s e c . 7 3 8 ; Banking l a w Pamphlet, 1 9 2 9 , s e c . 1 0 3 , p . 7 7 . )

CALIFORNIA.

Banks expressly an d t rust companies impliedly authorized t o become

members o f Federal Reserve System.

I n 1 9 1 3 , t h e so-cal led Bank Ac t o f C a l i f o r n i a w as amended so

a s t o p ro v id e i n p a r t t h a t a n y bank i s hereby authorized and emr-

powered t o j o i n o r a s s o c i a t e i t s e l f w i th a n y ' n a t io n a l r e se rv e a s so -

c i a t i o n o f t h e Uni ted S ta tes ' o r b ranch the reof , o r a n y p l a n now or

h e r e a f t e r c r e a t e d

o r

e s t a b l i s h e d

b y a c t o f

cong res s whether such bank-

i n g o r

cur rency assoc ia t ion

o r

p l a n

b e

c r e a t e d

b y

congress under

t h e

above

o r a n y

ot he r name". (C al if or ni a Bank

A c t , a s

amended

i n

1913*,

s e c . 5 6 . ) T h e s e c t i o n o f t h e laws conta ining t h e above provis ion was

amended i n 1 9 1 5 , b u t t h e wording o f t h e p ro v i s io n i n ques t ion was not

changed.

I n 1 9 1 9 , t h e

bank

a c t w a s

further amended

so

t h a t

i t now p r o -

v id e s

i n

p a r t t h a t

Any

bank

i s

hereby authorized

a n d

empowered

t o b e -

come a member o f a Federal res erv e bank, not hin g i n t h i s a c t s h a l l p r o -

h i b i t a n y such bank from becoming a member o f a Federal reserve bank, i n

t h e manner provided i n t h e f e d e ra l r e se rv e a c t , no r f rom inves t ing any

p a r t of i t s c a p i t a l o r su rp lu s o r rese rve fund i n t h e cap i ta l s tock

o f such federal reserve bank, i n accordance with t h e terms a n d p r o v i -

s io n s o f such federa l rese rve a c t ; * * (Ca l i fo rn i a Bank A c t , a s

amended i n 1 9 1 9 , s e c . 5 6 . )

In 1919

legis la t ion a lso amended

t h e

laws covering t rust

com-

p a n ie s so a s imp l i e d ly t o authorize such companies t o become members of

t h e Federal Reserve System, t h e p ro v i s io n i n ques t ion p rov id i ng i n pa r t

t h a t Any t r u s t company upon becoming a member o f a federal reserve bank

i s a u th o r i z e d a n d empowered * * * . (Ca l i fo r n ia Bank A c t , a s amended

i n 1 9 1 9 , s e c . 9 0 . )

7/17/2019 frsbog_mim_v34_0450.pdf


X.6875

- 4 -

T he Ca l i fo rn ia Bank A qt p rov ides tha t t h e Word ''bank?

1

a s Used

th e re in sh a l l i n c lu d e

a n y

c o rp o ra t io n

11

t r a n s a c t i n g

a

t ru s t b u s in e s s " .

(Ca l i fo rn ia Bank

A c t , s e c . 2 . )

Compliance with reserve provis ions o f Federal Reserve A c t a s r e l i e v i n g

compliance with State l a w .

P r i o r t o 1 9 1 9 , member banks a n d trust companies were n o t p e r -

m i t t e d t o main ta in t h e r e se rv e s p r e sc r ib e d b y t h e Federal Reserve Ac t

i n

l i e u

o f t h e

r e s e r v e s p r e s c r i b e d

b y t h e

S t a t e

la w , a s

l e g i s l a t i o n

enacted

i n 1 9 1 5

only permitted such banks

a n d

trust companies

t o

main-

t a i n a s r e s e r v e s o n depos i t wi th a Federal r ese rv e bank such po rt io n o f

t h e i r t o t a l r e s e r v e s a s w a s r e q u i r e d b y members o f t h e Federal Reserve

System. (C al i fo rn ia Bank A c t , a s amended i n 1 9 1 5 , s e c . 2 0 . )

I n t h e

Bank

A c t , a s

amended

i n 1 9 1 9 ,

there were

tw o

p ro v i s io n s

r e l a t i n g

t o

reserve requirements which read

a s

fo l lows:

S e c . 2 0 . Every commercial bank sh al l main tain t o t a l re se rv es * * *

I f a n y bank shall have become a member o f a f e d e r a l

rese rve bank , i t sh al l comply wit h t h e rese rve requ i rements

o f t h e f e d e r a l r e s e r v e a c t a n d i t s amendments, a n d i t s c om -

p l i a n c e th e re wi th sh a l l b e i n l i e u o f , a n d sha l l re l ieve such

bank from compliance with,

t h e

p ro v i s io n s

o f

th i s soc t ion .

* * * . »

S e c . 6 8 . Every sav ing s bank o r savings department o f a bank shall

a t a l l

t imes main ta in to ta l rese rves

* * *

I f a n y bank shall have bccome a member o f a f e d e r a l r e -

serve bank, i t s h a l l a t a l l times main tain t h e rese rves requ i red

b y t h e f e d e r a l r e s e r v e a c t f o r t ime depos i t s , a n d i n a d d i t i o n

th e re to sh a l l

b e

r e q u i r e d

t o

main ta in

a

r e s e r v e

o f a t

l e a s t

two

p e r

centum

o f i t s

aggrega te depos i t s , exc lus ive

o f

Uni ted S ta tes ,

pos ta l sav ings , s ta te , coun ty a n d munic ipa l , a n d o ther pub l ic

money deposits, which a r c secured a s i s r e q u i r e d b y l a w , which

t w o p e r centum shal l consis t o f g old b u l l i o n , o r a n y form o f

money

o r

cur rency au thor ized

b y t h e

laws

o f t h e

Uni ted S ta tes . "

Tha t pa r t o f Sec t ion 20 above quoted h a s n o t been amended since

i t s enactment i m 1 9 1 9 , b u t th at pa rt quoted from Sect ion 68 was amended

i n 1 9 2 1 t o r e a d a s fo l lows:

I f a n y

savings bank shall have become

.a

member

of a

federa l rese rve bank , i t s h a l l comply wi th t h e reserve require-?

ments o f t h e f e d e ra l r e se rv e a c t a n d i t s amendments, a n d i t s

compliance therewith shal l b e i n l i e u o f , an d s h a l l r e l i e v e

such savings bank o r savings department o f a departmental bank

from compliance with t h e p r o v i s i o n s o f t h i s s e c t i o n . " ( L . 1 9 2 1 ,

c h . 7 8 0 , s e c . 2 8 , p . 1400.)

7/17/2019 frsbog_mim_v34_0450.pdf


X - 6 8 7 5 ^ ^ ^

I t w i l l b e no ted tha t i n t h e above quoted provis ions o f sect ion

SO t h e r e i s n o s p e c i f i c r e f e r e n c e t o t h e rese rve requ i rements o f t r u s t

companies;

a n d ,

a l though

t h e

word "•bank?

1

i s

d e f in e d

b y t h e

Bank

Ac t a s

i n c lu d in g a n y c o r p o r a t i o n " t r a n s a c t i n g a t r u s t b u s in e s s" (C a l i fo r n i a

B6nk Act* s e c . 2 ) , i t would seem to be a ques t ion o f c o n s t r u c t i o n a s to

whether o r n o t t r u s t companies could b e inc luded wi th in t h e meaning o f

t h e word "bank", a s t h e word i s used i n t h a t p a r t o f s e c t i o n 2 0 r e l a t -

i n g t o

banks which have become members

o f t h e

Federal Reserve System,

inasmuch

a s t h e

opening sentence

o f t h e

s e c t i o n r e f e r s

t o

commercial

banks.

COLORADO.

Banks

a n d

t r us t companies per mi t t ed

t o

become members

o f

Federal

Reserve System.

Under t h e terms o f a n a c t approved Ap ri l 4 , 1 9 1 9 , a S ta te

bank o r trust company i s given "power t o su b sc r ib e t o t h e c a p i t a l

s to c k

a n d

become

a

member

o f a

Fe de ra l Res erv e Bankf . (Laws

o f 1 9 1 9 ,

A c t

approved April

4 , 1 9 1 9 , p . 2 9 8 , s e c . 2 ;

C o u r t r i g h t ' s M i l l s

A n-

n o t a t e d S t a t s . , 1 9 3 0 , s e c . 4 0 3 i - 4 0 3 j , p . 1 9 2 b ; Banking Law Pam-

p h l e t , 1 9 2 8 , s e c . 1 6 7 , p . 8 0 . )

Compliance with Federal Reserve

A ct

reserves re l ieves compliance with

rese rve requ i rements p f S t a t e l a w .

I n 1 9 2 3 , t h e l e g i s l a t u r e o f t h i s S t a t e e n a ct e d l e g i s l a t i o n

prescribing when member banks a n d trust companies may be re l ieved f rom

complying wit h St at e re se rv e laws,

t h e

p ro v i s io n

i n

th i s connec t ion

p r o -

vid ing tha t "wi th t h e approval o f t h e State Bank Commissioner, a n y c o r -

p o r a t i o n now or he rea f te r o rgan ized under t h e laws o f t h i s s t a t e as a

trust company o r banking trust company, o r en joy ing a n d e x e r c i s i n g t h e

r igh ts , powers

a n d

p r i v i l e g e s

o f a

bank

a n d

trust company, under

t h e

laws o f t h e s t a t e , i f a member o f a Federal reserve bank, may b y a com-

p l i a n c e wi th t h e requ i rements o f t h e Federal Reserve A c t a n d t h e regulac-

t i o n s

o f t h e

Federal Reserve Board

a s t o t h e

maintenance

o f

r e se rv e s ,

b e

r e l i e v e d

t o t h e

requ i rements

o f t h e

laws

o f

t h i s s t a t e r e l a t i n g

t o

such re se rv es ." (Laws o f 1 9 2 3 , p . 1 9 1 , s e c . 1 ; C o u r t r i g h t ' s Mi l l s

Annota ted S ta t s . , 1 9 3 0 , s e c . 3 4 1 a , p . 1 4 6 a ; Banking Law Pamphlet , 1 9 2 8 ,

s e c . 1 4 9 , p . 7 3 . )

C0M3CTICUT.

Banks a n d t r u s t companies may purchase s tock i n Federal Reserve Bank.

P r i o r

t o 1 9 3 1 t h e

laws

o f

t h i s S t a t e

d i d n o t

c o n t a i n

any

pro v is ion s expre ss ly au t hor iz i ng banks o r trust companies t o purchase

7/17/2019 frsbog_mim_v34_0450.pdf


•i 6 *

X 4 6 8 7 4 5 6

s tock i n a n d becomc members. o f fed er al res orv e banks. Under t h e terms

o f a n a c t approved June 8> l9<37, however, banks a n d trust companies

m ay

purchase

a n d

ho ld corpora te se cu r i t i es

o f a n y

d e s c r i p t i o n ,

p r o -

vided

t h e

total amount

a t t h e

purchase pr ice invested

i n

corpora te

s tocks sha l l a t n o t ime exceed twenty-five p e r centum o f i t s combined

cap i t a l , su rp lu s a n d und iv ided p ro f i t s a n d provided i t s investment i n

t h e s tock of any one corpora t ion sha l l n o t exceed t o n p e r centum o f

t h e

s tock

o f

tha t corpora t ion

o r

exceed

t e n p e r

centum

o f t h e

percentage

pre scr ibe d he re in , whichever may b e t h e g r e a t e r , * * *

11

(Pu bli c Acts,

1 9 2 7 , A c t approved June 8 , 1927 , ch . 25 1 . ) The Ac t j u s t r e f e r r e d t o

w as included, without change i n t h e language quoted above, i n t h e G e n -

e ra l S t a tu t e s

o f

Connecticut, Revision

o f 1 9 3 0 , V o l . I I ,

T i t l e

3 7 , c h .

2 0 6 , s e c .

3885.

Section 3885 o f t h e General Sta tutes was amended by ch . 162

o f t h e Public Acts o f 1 9 3 1 , e f f e c t i v e J u l y 1 , 1 931 , and a s so amended

i t expres sly recogniz es t h e r i g h t o f banks an d trust companies t o hold

federal reserve bank s tock. As amended i t provides i n p a r t , t h a t a

bank o r trust company may purchase a n d ho ld co rpo ra t e s ecu r i t i e s o f

a n y des cr i p t i on , p rov ided t h e total amount a t t h e purchase pr ice i n -

ves ted i n corporate s tocks shal l a t no time exceed t e n p e r centum o f

i t s combined ca pi ta l , sur plu s an d und iv ided p ro f i t s , an d provided i t s

investment

i n t h e

s tock

of any one

corpor at ion sha l l exceed ne i t he r

f i v e

p e r

centum

o f t h e

s tock

of

tha t corpora t ion

n o r

t h r e e

p e r

centum

o f such combined c a p i t a l , s ur pl us an d undivided p ro f i t s , except th a t

such corporate s tocks a s were owned on Apri l 1 , 1 931 , may b e r e t a ined ,

b u t such l im i t a t i o ns sha l l n o t apply t o t h e s tock of any f e d e r a l r e -

serve bank, * * * .

State reserve laws d o n o t apply t o members o f Federal Reserve System,

On May 29 , 1 925 , an a c t of th e General Assembly o f th i s

S t a t e w as approved which provides that T he p rov i s ions o f t h e g e n -

e r a l s t a t u t e s r e l a t i n g t o r e se rves a n d cash balances o f state banks

a n d

trust companies shall

n o t

apply

to any

bank

o r

t r u s t company which

i s a

s tockholder

i n a n y

fe de ra l reser ve.b ank?. (Connect icut Publ ic

Acts , 1 9 2 5 , A c t approved May 29 , 192 5 , ch . 13 5 . ) The pr ov is io n above

r e f e r r e d to is now incorpora ted i n t h e General Sta tutes o f Connecticut,

Revis ion o f 1 9 3 0 , V o l . I I , T i t l e 3 7 , c h . 2 0 6 , s e c . 3898, exactly a s

quoted with t h e except ion o f t h e word "general", which h a s been omitted.

delaware.

Banks an d tr u s t companies aut hor ize d t o become members of Federal Reserve

System.

I n 1 9 1 5 , l e g i s l a t i o n w as enacted i n t h i s S ta te which makes

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

i t

l awf u l

f o r

State banks

a n d

trust companies

t o

become members

o f t h e

Federal Reserve System*

(Ac t o f

March

8 , 1 9 1 5 ,

Laws

o f

Delaware,

c h . 1 0 ? , p . 3 2 2 ;

Banking

Law

Pamphlet ,

1 9 2 9 , s e c . 1 8 *

p . 3 8 , )

Member banks

a n d

tr u st companies only re qu ir ed

t o

mainta in r eserves

r e -

qui red b y Federal Reserve A c t .

A n a c t

enacted

i n 1 9 1 9 , b y t h e

General Assembly

o f

t h i s S t a t e , p r ov i des

i n

pa r t t ha t

t h e

"State bank commissioner

i n de termining , i n t h e course of h i s examination, t h e amount

o f

lawful money reserve required under

a n y l a w o f

t h i s S t a t e

t o b e

mainta ined ,

a t a l l

t imes ,

b y

State Banks

a n d

Trus t

Com-

pan i es , s ha l l

n o t

require such State Banks

a n d

Trust Companies

as may be members o f t h e Federal Reserve Bank i n t h e Federal

Reserve Dis t r ict embracing

t h e

S t a t e

o f

Delaware

t o

mainta in

a

grea ter r eserve than tha t r equi red

b y t h e

Federal Reserve

A c t .

(Session Laws

o f 1 9 1 9 , c h . I l l , p . 2 5 5 , s e c . 9 ;

Banking

Law

Pamphlet ,

1 9 2 9 , s e c . 9 , p . 1 0 . )

FLORIDA.

Banks

a n d

t rus t companies author ized

t o

inves t

i n

s tock

o f

Federal

Reserve Banks.

The l e g i s l a t u r e o f t h i s S t a t e , b y a n a c t o f June 4 , 1 9 1 7 ,

provided "That

i t

s h a l l

b e

unlawful

f o r a n y

bank

o r

trust company'

7/17/2019 frsbog_mim_v34_0450.pdf


- 8 -

X-6875

: 458

"organized under t h e laws o f t h i s S t a t e And doing "business i n t h i s

S t a t e , t o d i r e c t l y o r i n d i r e c t l y i n v e s t a n y o f t h e funds o f sa id

bank o r trust company i n s to c k of any incorporated connany i n t h i s

S t a t e o r elsewhere, exceot i n t h e s tock of t h e Federal Reserve Bank

o f t h i s d i s t r i c t ; * * * » (Acts of 1917, Act of JUne 4 , 191 7 , ch .

7629, s e c . 2 . )

The Ac t o f June 4 , 1917 , was amended i n 1 9 2 9 , b u t t h e

wording above quoted

w

a

s n o t

changed. (Act s

of 1929 , ch .

13576,

s e c . 1 1 ; Banking Law Pamphlet, 1 9 3 0 , s e c . 4 1 5 2 , p . 1 6 . )

No pro vi s i ons 'permit t ing compliance with reser ve pr ovi s i ons o f Feder-

a l Reserve A c t .

T he laws o f t h i s S t a t e ' d o n o t appear t o con ta in a n y p r o -

v i s i o n s s p e c i f i c a l l y a u t h o r i z i n g a member "bank o r trust company t o

main ta in rese rves i n accordance with t h e p r o v i s i o n s o f t h e Federal

Reserve Ac t in l i e u o f S t a t e la w requirements .

GEORGIA.

Banks

a n d

t rust companies authorized

t o

become members

o f

Federal

Reserve Sy stem. ~~~~~~ •

I n 1 9 1 5 ,


was

enacted

i n

chis State which

expressly authorized Sta te banks a n d trust companies t o subscr ibe

f o r s tock a n d become members o f t h e Federal Reserve Bank o f t h e

d i s t r i c t

t o

which they

may

nro-oerly

b e

ass igned

b y t h e

Federal

Reserve Board * * *; p rov ided t h e same i s approved b y r e s o l u t i o n

o f t h e Board o f d i r e c t o r s o f such bank a n d i n accordance with

t h e

requ i rements

o f t h e

Federal Reserve

A c t .

(Acts

of 1915 ,

p . 3 3 . )

On August 16 , 191 9 , an a c t was approved which repeals

t h e above p ro v is ion , b u t which contains a p ro v i s io n a u th o r i z in g

banks

t o

become members

o f t h e

Federal Reserve System

a n d

which

i s i n many re sp ec ts s im ila r t o t h e r e p e a l e d p ro v i s io n . The 1919

a c t

p ro v id e s

i n

part that "Banks

a r e

a u th o r i z e d

a n d

empowered

t o su b sc r ib e f o r s to c k a n d become members o f t h e Federal Reserve

Bank o f t h e d i s t r i c t t o which they properly may be a s s ig n e d b y

t h e Federal Reserve Board, i n accordance with t h e Acts o f Congress

regula t ing Federal Reserve Banks,

a n d a n y

bank becoming such

member shall

b e

a u th o r i z e d

t o

conform

t o t h e

requ i rements

and

r e g u l a t i o n s o f such Federal Reserve Bank, a n d o f t h e Federa l R e -

ser ve Board". (laws of 1919 , Ac t approved August 1 6 , 1 9 1 9 , A r t .

XIX, s ec . 38 ;

Banking

Law

Pamphlet,

a s

amended

t o a n d

inc lud ing

August 2 6 , 1 9 2 5 , A r t . X I X , s e c . 3 8 . )

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

- § ' v : 4 5 9

The ac t o f

AU##t

l 6

t

1 9 1 9 ,

a lso doffff t i is

t h e

nrovision

t h a t

ko

batik Shall subscribe

fd£ bi*

purchase

a n y

stocks except

s tock i n t h e federal Reserve Bank * * *, necessa ry t o q u a l i f y f o r

membership therein, * * * . (Laws of 191 9 , Ac t approved August

1 5 , 1 9 1 9 , A r t . X IX , s e c . 2 3 . ) ; a n d ; a l though t h e s e c t i o n of the

l aws con ta in ing th i s p rov is ion was amended in 1924 and 1930 , th e

e f f e c t o f t h e p ro v i s io n w a s n o t changed.

I t

w i l l

b e

noted that

t h e 1 9 1 5

l e g i s l a t i o n e x p r e s s l y

authorized both banks

a n d

trust companies

t o

become members while

t h e s e c t i o n s of the 1919 p ro v i s io n s ( s e c . 2 3 , a s amended in 1924

a n d 1 9 3 0 , a n d s e c . 3 6 ) express ly authorize only banks t o j o in

t h e Federal Reserve System. The laws o f Georgia, however, d e -

f i n e t h e word "ban ?

1

, a s used i n t h e banking laws, a s inc lud ing

trust companies doing a banking bu si ne ss . (Laws of 19 19 , Ac t

approved August 1 6 , 1 9 1 9 , A r t . 1 , s e c . 1 ; Banking Law Pamphlet,

a s amended t o a n d including August 2 6 , 1 9 2 5 , A r t . 1 , s e c . 1 , p .

1.)

Compliance with reserve provisions o f Federal Reserve A c t deemed

compliance with provis ions o f S t a t e l a w .

By an Act approved August 2 0 , 1 9 1 8 , t h e General Assembly

o f th i s S ta te p rov ided tha t a n y State bank o r t r u s t company "which

i s o r which becomes a member o f a Federal Reserve bank shall keep

a n d main ta in a s a lawfu l rese rve t h e same reserves a s a r e requ i red

o f

other banks members

o f t h e


and a com-

p l i a n c e

b y a n y

such bank

o r

trust company

i n

t h i s s t a t e w i th

t h e

rese rve requ i rements o f t h e Federal Reserve A ct s h a l l b e held

to be a f u l l compliance with t h e p ro v i s io n s o f t h e laws o f t h i s

S t a t e o n t h e s u b j e c t of bank rese rves , a n d such bank o r t r u s t com-

pany shal l

n o t b e

r e q u i r e d

t o

carry reserves other than such

a s

a r e

requ i red under

t h e

therms

o f t h e

Federal Reserve

A c t .

(Laws

of 1918 , Ac t

approved August

2 0 , 1 9 1 8 , s e c . 1 . )

I n 1 9 1 9 , t h e above provis ion w as r e p e a l e d , a n d with

r e f e r e n c e t o r e s e r v e s , th e new l e g i s l a t i o n p ro v id e d " th a t a n y bank

which i s a member o f t h e Federal Reserve System may in l i e u of the

rese rve here in requ i red keep an d mainta in such reserve a s i s r e -

quired under

t h e

Acts

of

Congress re la t ing

t o

Federal Reserve

Banks". (Laws

o f 1 9 1 9 , A r t . X IX , s e c . 2 7 . )

This pro vis ion

a p -

p e a r s t o cover trust companies (Laws o f 1 9 1 9 , A r t . 1 , s e c . 1 . ) ;

a n d a l though t h e s e c t io n o f t h e laws i n which t h e p ro v i s io n i n

ques t ion w as con ta ined was amended i n 1 9 2 0 , t h e wording remained

t h e same. (M i ch i e' s Ann otat ed Code, 1 9 2 6 , s e c . 2366 (173); Bank-

ing Law

Pamphlet ,

a s

amended

to and

including August

2 6 , 1 9 2 5 ,

A r t . X I X, s e c . 2 7 , p . 7 7 . )

7/17/2019 frsbog_mim_v34_0450.pdf


X-6B7S

- • i e > : 4 6 0

9m* - ml ••• •••

Banks a n d t rus t companies author ized t o subscr ibe t o Federal Reserve

Bank stock.

I n 1 9 1 5 , t h e

l e g i s l a t u r e

o f

t h i s S t a t e enact ed l e g i s l a t i o n

which author ized

a

"bank?'

t o

subscr ibe

t o t h e

s tock

o f a

Fader

ml

Reserve Bank. This l e gi s l a t io n provided th at Any bank i n t h i s

s t a t e i s au t ho r i zed t o s ubs c r i be t o t h e s tock o f a Federal Reserve

Bank, a s provided b y t h e laws o f t h e United St at es ." (Laws o f

1 9 1 5 , c h . 8 1 , s e c . 5 , p . 1 9 6 . )

I n 1 9 2 1 , t h e above provis ion was amended so as t o au t ho r -

i z e tr u s t companies al so t o become members o f t h e Federal Reserve

System. (Laws

o f 1 9 3 1 , ch . 2 3 1 , p . 5 1 5 . )

I n 1 9 2 5 , t h e l eg i s l a t u r e adop t ed a new code o f t h e bank-

i n g laws f o r this State , which provides that A ny bank Incorporated

under t h e laws o f th i s S ta te sha l l have t h e power t o s ubs c r i be t o

t h e cap i t a l s t ock a n d become a member o f a Federal Reserve Bank."

(Laws o f 1 9 2 5 , c h . 1 3 2 , A r t . 1 , s e c . 4 7 ; Banking Law Pamphlet,

1 9 2 5 , s e c . 4 7 , p . 2 4 . ) I t

w i l l

b e

noted that this provis ion only

mentions a n y bank?'; b u t inasmuch as the new code includes a " t r u s t

company" vithin i t s d e f i n i t i o n o f a l a n k , i t apparent ly does n o t

a f f e c t t h e r i g h t o f trust companies t o j o i n t h e Federal Reserve

System. (Laws*

o f 1 9 2 5 , ch . 1 3 ;* , A r t . 1 , s e c . 2 ;

Banking

Law Pam-

p h l e t , 1 9 2 5 , s e c . 2 , p . 2 . )

Compliance wi t h re serve •'••q ilrementf-

o f

Federal Reserve

A ct

deemed

compliance wi th reserve ~ e qui p en,euts o f S t a t e l a w .

Th e 1 9 1 5

l eg i s l a t i on a l s o p r ov ided t ha t

A ny

bank'becom-

i n g a

member

o f a

Federal Reserve Bank

i s

au t ho r i zed

t o

comply with

t h e laws o f t h e Uni ted S ta tes , a n d t h e r u l e s a n d r e g u l a t i o n s o f t h e

Federal Reserve Board a n d t h e Comptroller o f t h e Currency, anything

i n t h i s a c t o r i n t h e laws o f t h i s S t a t e t o t h e con t r a r y no t w i t h -

standing". (Laws o f 1 9 1 5 , ch . 8 1 , se c . 5 , p . 1 9 6 . ) In 1 9 2 1 t h i s

p r o v i s i o n

w as

amended

t o

r e a d

Any

bank

o r

t r u s t comoany becoming

a

member

of a

Federal Reserve Bank,

i s

au t ho r i zed

t o

comply with

* * * a l l t h e p r o v i s i o n s o f t h e Federal Reserve A c t an d i t s amend-

ments a n d t h e r e g u l a t i o n s o f t h e Federal Reserve Board appl icable

t o such bank o r trust company an d to have a l l t h e powers a n d assume

a l l t h e l i a b i l i t i e s c o nf er re d a n d imposed b y s a i d a c t . (Laws o f

1 9 2 1 , c h . 2 3 1 , p . 5 1 9 . )

These pro vi s ion s perhaps au th or iz ed

mem-

b e r s t o ma i n t a i n r e s e r ves i n accordance with t h e p r o v i s i o n s o f t h e

Federal Reserve Act i n l i e u o f t h e p r ov i s i ons o f t h e S t a t e l a w .

7/17/2019 frsbog_mim_v34_0450.pdf


- 11 -

X-6875

I n 1 9 2 5 ,

however,

t h e

l eg i s l a t u r e adop t ed

a new

banking

code which specif ical ly permits member banks a n d trust companies

t o comply with t h e r e s e r ve p r ov i s i ons o f t h e Federal Reserve Ac t

i n

l ieu,

o f t h e

S t a t e

law

r equi rements ,

t h e

p r ov i s i ons

i n

ques t ion

pr ov i d i ng t ha t

a

compliance

b y a

member bank

o r

trust company

"wi th

t h e

r eserve requi rements

o f t h e

Federal Reserve

A c t

s h a l l

b e

h e l d

to be a

f u l l compl iance wi th those pro vi s io ns

o f t h e

laws

o f

this s tate which require banks

t o


i n

t he i r

v a u l t s

o r

with other banks,

and no

such bank

o r

trust company

s h a l l b e r e q u i r e d t o ca r r y o r maintain reserve other than such

a s i s

required under

t h e

terms

o f t h e

Federal Reserve Act'.'*

(Laws

o f 1 9 2 5 , c h . 1 3 3 . A r t . 1 , s e c . 4 7 ;

Banking

Law

Pamphlet ,

1 9 2 5 , s e c . 4 7 , p . 2 4 . )

Another pr ov is io n

of the new

code also

pr ov i des t ha t Any bank which i s o r becomes a member o f t h e F e d -

er al Rese rve System, s ha ll comply wit h t h e reserve requirements

o f t h e

Federal Reserve

A c t .

(Laws

o f 1 9 2 5 , c h . 1 3 3 , A r t . 1 ,

s e c . 2 6 ;

Banking

Law

pamphlet ,

1 9 2 5 , s e c . 2 6 , p . 1 6 . )

ILLINOIS.

No

p r o v i s i o n s

o n

s ub j ec t .

T he

laws

o f

t h i s S t a t e

d o n o t

appear

t o

con t a i n

a n y p r o -

vis ions speci f ical ly cover ing ei ther membership

o f

banks

o r

t r u s t

companies, i n t h e Federal Reserve System o r t h e r eserves r equi red

o f

such banks

o r

trust companies.

INDIANA.

Banks

a n d

trust companies

may

become members

o f


I n 1 9 2 1 , t h e

Indiana Legi s l a ture passed

a n a c t

which

au t hor i ze s l oan , t r u s t

a n d

aafe deposit companies

t o

purchase

a n d ho l d , f o r t h e purpose o f becoming a member o f a f e d e r a l r e -

serve bank,

so

much

o f t h e

ca pi t a l s tock thereof

a s

w i l l qua l i f y

i t f o r

membership

i n

such reserve bank,

* * * ; to

become

a

member

o f

such fe de ra l res erv e bank,

a n d t o

have

a n d

exe r c i s e

a l l

powers,

n o t i n

c o n f l i c t w i t h

t h e

laws

o f

th i s s t a t e , which

a r e

conferred upon

a n y

such member

b y t h e

f e d e r a l r e s e r v e

a c t ; *

**•*

(Acts

o f 1 9 2 1 , p . 4 2 ;

Banking

Law

Pamphlet ,

1 9 2 9 , s e c . 1 0 ( 9 ) ,

P . 3 3

(37) . )

I t

w i l l

b e

noted tha t

t h e

above quoted provision

e x -

pr e s s l y au t ho r i zes on ly " l oan , t r us t

a n d

safe deposit companies"

7/17/2019 frsbog_mim_v34_0450.pdf


18

X-6875

: 463

t o

purchase s tock

i n

az6t become member ba nk s

ox a

Federal Reserve

Bank; a n d t h e laws d o n o t appear t o conta in a n y p r ov i s i ons s pec i f -

i c a l l y g r a n t i n g

a

s i mi l a r au t hor i za t i on

t o

so-called ""banks

o f d i s -

count

a n d

d e p o s i t " .

I t

a pp ea rs, however, tha t such bsa ks

a n d s a v -

ings banks

a r e n o w

au t hor i zed

b y

t r i p l i ca t i on

t o

become members

o f

t h e


i n

view

o f t h e

par t i cu lar l anguage used

i n t h e fol lowi ng pro vis ion dea l ing with res erv es o f a n y bank,

trust company

o r

savings bank

* * *

which

i s o r

which becomes

a

member

of a

federal reserve bank?' .

Coml iance wi th r eserve provi s ions

o f

Federal Reserve

A c t

held

compl iance wi th provis ions

o f

S t a t e

l a w .

I n 1 9 2 7 ,


w as

enacted

i n

this State which

p r o -

vides "That

a n y

ban k, t r u s t company,

o r

savings bank organized

and

doing business under

t h e

laws

o f


i s o r

which

b e -

comes

a

member

o f a

fed er al rese rve bank, sh al l keep

a n d

maintain

a s a

l awf u l r e s e r ve

t h e

same reserves

a s a r e

r equ i r ed

o f

other

bank members

o f t h e

federal reserve sys tem,

a n d a

compliance

b y

a n y

such bank , t r u s t company

o r

savings bank wi th

t i e

eserve

r e -

quirements o f t h e f ede r a l r e s e r ve a c t s h a l l b e he l d to be a f u l l com-

p l i ance wi t h t h e p r ov i s i ons o f t h e laws o f t h i s s t a t ? o n t h e subject

o f bank reserves , a n d such ban k, t r u s t company, o r savings bank shall

b e

r e q u i r e d

t o

carry only such reserves

a s a r e

r equi red under

t h e

terms

o f t h e

f ede r a l r e s e r ve

a c t .

(Acts

o f 1 9 2 7 , c h . 1 5 2 , p . 4 6 1 , s e c . 1 ;

Banking

Law

Pamphlet ,

1 9 2 9 , s e c . 1 , p . 8 0 . )

IOWA.

Banks

a n d


t o

become members

o f

Federal Reserve

Bank.

'

I n 1 9 1 5 , t h e

General Assembly

o f

th i s S ta te passed

a n a c t

which provides "That a n y state bank, savings bank o r t r u i t company

organised under t h e laws o f t h i s s t a t e i s au t hor i zed a n d empowered,

upon

a

vote

o f t h e

shareholders thereof owning

n o t

l e s s t h a n f i f t y -

one oer

cent

o f t h e

cap i t a l s t ock

o f

such state bank, savings bank

o r

trust company,

t o

become'|& member

o f t h e

federal reserve bank

a n d t o

i nves t the i r funds in* the s tock

o f t h e

f edera l r eserve bank

i n t h e f e d e r a l r e s e r v e d i s t r i c t i n which such banks o r t r u s t com-

pan i es a r e l o c a t e d , a n d t o i ncur l i a b i l i t y t he r e f o r . " (Laws o f

1 9 1 5 , s e c .

1889-0; Code

o f 1 9 2 7 , s e c .

9269.)

<

Compl iance wi th res er ve p rov is i on s

o f

Federal Reserve

A c t

only required

o f

member banks

a n d

trust companies.

I n 1 9 1 9 , t h e

General Assembly

o f

t h i s S t a t e pas s ed l e g i s l a t i on

7/17/2019 frsbog_mim_v34_0450.pdf


ia -

X-6875

\ 463

requiring member "banks

a n d

trtfst companies

t o

carry only

t h e

reserves

p r e s c r i b e d

b y t h e

Federal Reserve

A c t .

That l e g i s l a t io n provides

t h a t

Any

state bank, savings bank,

o r

trust company incorporated

under

t h e

laws

o f


i s o r

h e r e a f t e r

may

become

a

member

o f t h e

federal reserve bank system

of t he

Uni ted Sta tes

of

America, shall

b e

r equ i r ed

t o

carry dur ing

t h e

pe r i od

o f

such

mem-

bership only such cash reserve funds as may be required from time

t o time t o b e maintained b y national bank members o f sa id f edera l

re se rv e bank syste m." (laws

o f 1919 , ch . 319 , see . 1 ;

Code

o f

1 9 2 7 , s e c .

9270; Banking

la w

Pamphlet,

1 92 9 , s e c .

9270,

p . 3 5 . )

KANSAS.

Banks expressly permitted t o become members o f Federal Reserve Bank;

I n 1 9 1 5 , t h e l e g i s l a t u r e of this State amended t h e laws

p r o h i b i t i n g a bank from making c e r ta in inve stme nts of i t s funds so

a s t o provide tha t a n y bank may become a s tockholder i n , a n d men>-

b e r o f , t h e Federal Reserve Bank o f t h e Federa l Reserve d i s t r i c t

where such state bank i s lo ca te d" . (Laws o f 1915 , ch . 88 , se c . 1 ;

B e v . S t a t s , o f 1 9 2 3 , s e c . 9-111.) The s ec t i on o f t h e laws contain^

i n g t h i s p r ov i s i on was amended in 1921 , and again i n 1 9 2 7 ; b u t

n e i t h e r o f these amendments altered t h e e f f e c t o f t h e 1 9 1 5 p r ov i s i on .

Trust companies apparently permitted t o become members o f Federal

Beserve System.

The laws o f t h i s S t a t e do no t conta in a n y p r o v i s i o n s e x -

p r e s s l y p e r m i t t i n g o r au th or iz in g t r us t companies t o become members

o f t h e Federal Beserve System; b u t i t Trould seem th at such in s t i t u -

t ions have this r ight under a provision which empowers them to buy

a n d s e l l a l l k inds o f government, s t a te , county, municipal a n d c o r -

porat ion bonds , a n d a l l k inds o f nego t i ab l e and non-negot iable paper ,

s e c u r i t i e s a n d sto cks : Provi ded, That t h e total inves tment of any

such trust company i n bank stock shall a t no time excced one-fourth

i t s pa id-up capi t a l* * * * «. (lav/s o f 1901 , ch . 407 , s ee . 2 , a s

amended by o f 1903 , ch . 528 , so c . 1 , a s amended by Lav/s o f

1907 , ch . 425 , sec . 1 , Ac t o f March 21 , 1907 ; Bev . S t a t s , of 192 3,

s e c . 17-2002; Banking Law Pamphlet , 1 9 2 9 , s a c . 2 ( 8 ) , p . 3 7 . ) . I t

i s understood, however, that a t t h e present t ime there a r e n o t rus t

companies i n this State %'hich .are members o f t h e Federal Beserve

System.

% •

7/17/2019 frsbog_mim_v34_0450.pdf


- 1 4 -

X-6875

• 4 8 4

ftp p ro v is ion s pe r mi t t in g co ^ l l an de wi th rese fVd requ i rements o f Federal

Reserve Ac t in l i e u o f S t a t e la w requirements .

T he laws o f t h i s S t a t e d o n o t appear t o c o n ta in a n y p r o v i -

sions permitting members o f t h e Federal Reserve System t o main ta in r e -

se rv e s

i n

accordance with Federal Reserve

A c t

requ i rements ins tead

of

S t a t e

la w

requ i rements .

KENTUCKY.

Banks a n d t rust companies authorized t o become members o f Federal

Reserve Bank.

I n 1 9 1 4 , t h e l e g i s l a t u r e o f t h i s S ta te passed a n a c t which

prov ides tha t A ny bank o r t r u s t company org ani zed under t h e laws o f

t h i s Commonwealth

may

subscr ibe

fo r and own

s tock

o f t h e

Federal

R e -

serve Bank within

t h e

Federal re ser ve di s t r i c t where such bank

o r

t ru s t

company i s l o c a t e d and may take a n y s teps necessa ry t o become a member

o f such Fe de ra l re se rv e bank ." (Laws o f 1 9 1 4 , c h . 1 6 , e e d . 1 ; C a r r o l l ' s

Ken tucky S t a t s . ,

1 9 3 0 , s e c .

584a; Banking

Lew

Pamphlet , incl udin g

1986

l e g i s l a t i o n , « e a , 584a, p . 25*)

Prov is ions regard ing rese rves .

On March 14 , 191 4 , a n Ac t o f th e General Assembly w a s a p -

proved permi t t ing S ta te banks a n d trust companies t o purchase stock

i n a

Federal reserve bank

a n d

p r o s c r i b i n g

ne w

reserve requirements

f o r

Sta te banks

a n d

t r u s t companies. (Acts

o f 1 9 1 4 , c h . 1 6 , p . 6 1 , ) .

With re fe rence to r e s e r v e s , t h e a c t provided that "each bank and

t r u s t company, org ani zed under t h e laws o f t h i s Commonwealth a n d

a u th o r i z e d by l aw to receive deposi ts shal l keep on hand, a t a l l

t imes , a t leas t twe lve p e r cent of i t s t o t a l demand de po si ts and

f i v e p e r cen t of i t s to ta l t ime a n d savings deposi ts ; a n d , i n

c i t i e s wh ic h a r e r e s e r v e o r cen t ra l rese rve c i t ie s , u ry lc r t h e A c t

o f

Congress

o f

December

2 3 , 1 9 1 3 ,

known

a s t h e

Federal Reserve

A c t ,

a t l e a s t f i f t e e n p e r cent of i t s t o t a l demand de po si ts a n d f i v e p e r

cent of i t s to ta l t ime a n d sav ings depos i t s ; one- th i rd o f which r e -

se rve sha l l b e i n money a n d t h e remainder may b e i n b a l a n c e s d u e from

other banks

a n d

su b je c t

t o

c a l l .

* *

* T h i s

a c t ,

however,

c o n -

t a in e d no pr ov is io n ex pre ssl y auth or iz in g member banks a n d t r u s t

companies t o main ta in t h e r e se rv e s r e q u i r e d b y t h e Federal Reserve

Act in l i e u o f those requ i red b y t h e S t a t e l a w . T h e p ro v i s io n j u s t

quoted became Section

584 o f

"Kentucky S t a t u te s , C ar ro l l ' s

1915

Ed i t ion" ,

which, together with t h e Baldwin Law Book Company

1

s 1918 Supplement

w as adopted a s t h e l a w o f Kentucky on March 24 , 1922 (Acts 1 9 2 2 , c h .

1 0 4 , p .

295 . ) .

7/17/2019 frsbog_mim_v34_0450.pdf


- is *

X-6875 ,

485

Sec t i on .2 o f the Ad t o f March 2 6 , 1 9 1 8 , provided, "That

Sect ion 5 8 4 ; Kentucky St a t u t es , (Car ro l l 1915) be and same hereby

i s amended a n d r eenac t ed" , so a s to a dd a new paragraph providing

i n p a r t t h a t a n y such (member) bank o r t r u s t company s h a l l comply

wi t h t h e r eserve requi rements o f t h e Federal Reserve A c t a n d i t s

amendments a n d t h e compliance o f such bank o r trust company therewith

s h a l l b e i n l i e u o f , a n d s ha l l r e l i ev e such bank o r trust company

from compliance with t h e p r o v i s i o n s of t h e laws o f t h i s Commonwealth

r e l a t i n g t o t h e maintenance o f res erv es" (Acts o f 1918 , ch . 34 ,

s e c . 2 , p . 1 0 0 ) ; a n d t h e

en t i r e s ec t i on

w as

des ignated

a s

Sect ion

5 8 4 i n t h e 1 9 2 2 e d i t i o n o f Ca r r o l l ' s Kentucky St a t u t es .

Chapter 1 2 7 o f t h e Kentucky Acts o f 1922 , p . 377 (which

became

a l aw

wi thout being ei ther approved

o r

disapproved

b y t h e

Governor) provides , i n pa r t , t ha t : "Sec t ion 5 8 4 , Kentucky St at ut es ,

( C a r r o l l ' s

1 9 1 5

E d i t i o n ) ,

b e a n d t h e

same

i s

hereby amended

b y

e l i m i n a t i n g t h e words twelve p e r cen t , f i ve p e r cen t a n d f i f t e e n

p e r c e n t, wherev er same app ear i n s a i d s ec t i on , a n d s u b s t i t u t i n g

t h e r e f o r t h e words seven p e r cen t , t h r ee p e r cent a n d t e n p e r cent ,

so th a t sa id s ec ti on , when amended a n d r e - enac t ed , w i l l r ead a s

fo l lows :"

Fol lowing th i s , th ere

I s

quoted

t h e

p r o v i s i o n s

o f

Sect ion

5 8 4 o f t h e Ken tucky S t a t u t e s ( Ca r r o l l ' s 1 9 1 5 Edi t io n) wi th t h e

changes

i n t h e

pe r cen t ages

o f

r e s e r v e s

t o b e

mainta ined;

b u t t h e

ne w paragraph added t o Sect ion 5 8 4 o f t h e Kentucky Sta tu tes (Car ro l l ' s

1 9 1 5

Ed i t i on )

b y

Sect ion

2 o f th e Ac t o f

March

26 , 191 8 , was

omit ted.

Under these ci rcumstances , i t i s d i f f i c u l t t o determine whether t h e

General Assembly intended t o r epea l t h o p r ov i s i on pe r mi t t i ng t h e

maintenance b y member banks a n d trust companies o f t h e reserves re-**

qu i r ed

b y t h e

Federal Reserve

Act in

l i e u

o f

those r eq ui r ed

b y

S t a t e

l a w , o r whether t h e Legi s l a ture in tended only t o amend t h e paragraph

p e r t a i n i n g

t o t h e

pe r cen t ages

o f

r e s e r v e s

t o b e

mainta ined

b y a l l

Sta te banks a n d trust companies, member a n d nonmember. Th er e i s ,

however , pr in ted

on

pages

378 and 379 o f the

Kentucky Acts

o f

1 9 2 2 , a p p a r e n t l y a s p a r % o f Chapter 127 t h e r e o f , a r e s o l u t i o n

adopted

on

September

8 , 1 9 2 0 , b y t h e

28th annual meeting,

o f t h e

Kentucky Bank ers ' Ass oc ia t io n, from which i t i s c l e a r t h a t t h e

purpose

o f

t h i s

law was to

r educe

t h e

r e s e r ves r equ i r ed

o f

S t a t e

banks t o t h e amount required b y t h e Federal Beserve A c t o f member

banks o f t h e Federal Reserve System, a n d t h e r e s o l u t i on con t a i ns

no i n d i c a t i o n o f a n y i n t e n t i o n t o deprive State members o f t h e

Federal Reserve System o f t h e p r i v i l e g e o f ma i n t a i n i ng t h e r e -

s e r ves r equ i r ed b y t h e Federal Reserve A c t i n l i e u of t h o s e r e -

qu i r ed b y S t a t e l a w . ( T h e o n l y d i f f e r e n c e i s tha t , under t h e

S t a t e l a w , o n e - t h i r d o f t h e r e s e r v e s i s r e q u i r e d t o b e i n money

a n d t h e remainder i n ba l ances du e from other banks a n d s u b j e c t t o

cal l , whereas , under t h e Federal Reserve A ct t h e e n t i r e r e s e r v e

i s r e q u i r e d t o c o n s i s t of an a c t u a l n e t ba lance wi th t h e Federal

7/17/2019 frsbog_mim_v34_0450.pdf


x

6875

4 6 6

- 16 -

Reserve Bankt) T he compiler o f t h i s d ig e s t i s informed

that riiemiber banks

a n d

trust companies

i n t h e

S t a t e

o f

Kentucky continue

t o

main ta in

t h e

r e se rv e s r e q u i r e d

b y

t h e

Federal Reserve

A c t i n

l i e u

o f

those requ i red

b y

S t a t e l aw; so t h a t , i n p r ac t i ce , Chapter 1 2 7 o f t h e

Kentucky Acts

of 1922

a p p a re n t ly

h a s

been construed

a s

n o t

r e p e a l i n g

t h e

paragraph

o n

th is subject added

t o

se c t io n

5 8 4 o f t h e

Kentucky S ta tu tes (Car ro l l ' s

1 9 1 5

E d i t io n ) b y t h e A c t o f March 2 6 , 1 9 1 8 .

LOUISIANA.

Banks

a n d

t r u s t companies perm it t ed

t o

become members

o f

Federal

Reserve System.

A l l

S ta te banks, savings banks

a n d

t r u s t

co m-

panies organized under

t h e

laws

o f

Louis iana

a r e

"author*-

ized

a n d

empowered

t o

su b sc r ib e

f o r

s tock

a n d

become

members o f t h e Federal Reserve Bank o f t h e D i s t r i c t t o

which they may p r o p e r l y b e ass igned b y t h e Federal Reserve

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

Board

i n

accordance wi th

the Ac t o f

Congress adopte d December

153,

l913» provided

th 'e

same

i s

approved

by

r e s o l u t i o n

o f t h e

Board

o f

Direc tor6 o f such bank a n d i n accordance with t h e r equi rements of •

t h e

Federal Heserve

A c t .

(Acts

of 1914 , Ac t No . 305 , s e c . 1 ;

Banking

Law

Pamphlet ,

1 9 2 8 , s e c . 1 , o . 7 9 . )

No

pr ov is i on s per mit t in g compl iance wi th Federal Reserve

A c t

r eserve

requi rements

i n

l i e u

o f

S t a t e

la w

requirements ;

b u t

r e s e r v e s

i n F e d -

eral Reserve Bank construed

a s

"cash

on

hand"

T he

laws

o f

t h i s S t a t e

d o n o t

con t a i n

a n y

p r o v i s i o n s

p e r -

m i t t i n g

o r

author iz ing banks

a n d

trust companies, which

a r e

members

o f t h e


t o

comply wi th

t h e

r e s e r ve r equ i r e -

ments

o f

Federal Reserve

A c t i n

l i e u

o f t h e

requirements

o f

Sta te

l a w ; b u t t h e

laws were amended

in 1918 so a s to

permit such member

banks

a n d

trust companies

t o

cons t rue cash reserves deposi ted

i n

Federal Reserve B

a

nks a s cash on hand." (Ac t 179 o f 190 2 , s e c .

1 4 , a s

amended

by Ac t 91 o f 19 18 ; Ac t 45 o f 19 02 , s e c . 5 , a s

amend-

ed by Ac t 92 o f 1918 ;

Banking

Law

Pamphlet ,

1 9 2 8 , s e c . 1 4 , p . 1 0 ,

a n d s e c . 5 , p . 2 9 . )

MAINE.

Trust Companies authorized t o become members o f Federal Reserve Bank.

T he

laws

o f

t h i s S t a t e

d o n o t

make

a n y

d i s t inc t ion be tween

a

so-called commercial bank

and a

trust company;

a n d b y a n a c t

approved

March 3 1 , 1 9 1 5 , t h e l eg i s l a t u r e p r ov i ded t ha t a n y trust company may

become a s tockholder i n a. Fed era l Reserve Bank with in t h e Federal R e -

serve Distr ict where said trust company i s s i t u a t e d * * * . (Laws of

1 9 1 5 , A c t

approved March

3 1 , 1 9 1 5 , c h . 2 6 2 ,

amending

s e c . 8 0 , c h . 4 8

o f

Revi sed Sta tu tes

o f 1 9 0 3 , a s

amended

b y c h . 1 5 ,

Public Laws

o f

1905.)

On

Apr i l

4 , 1 9 2 3 ,

another

a c t w a s

approved revis ing

a n d c o n -

s o l i d a t i n g

a l l of t h e

banking laws;

b u t a

p r ov i s i on r ead i ng p r e c i s e -

l y t h e

same

a s t h e

provision above quoted

i s

incorpora ted there in .

(Laws o f 1 9 2 3 , A c t approved April 4 , 1 9 2 3 , c h . 1 4 4 , s e c . 8 0 , p . 1 9 9 ;

Banking Law Pamphlet , 1 9 2 7 , s e c , 8 0 , p . 5 3 , )

Federal Reserve

A c t

r eserve requi rements subs t i tu ted

f o r

S t a t e

law

requirements .

The Ac t o f

March

3 1 , 1 9 1 5 ,

also provided that "while such

t r u s t company con tin ue s

a s a

member bank

* * * ( i t )

s h a l l

b e

subjec t

t o t h e

p r o v i s i o n s

o f

said 'Federal Reserve

A c t

1

, and any

amendments

t h e r e o f r e l a t i v e

t o

bank reserves

i n

s u b s t i t u t i o n

f o r t h e

requirements

1

. '

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

... *• i s i 4 6 8

o f t h e

^ t a t e

l a w

r e l a t i n g

t #

( taws

of 1915 , Ac t

approved

March

3 1 , 1 9 1 5 , c h . 2 6 2 ,

amending

s e c . 8 0 , c h . 4 8 o f

Revised Statutes

o f 1 9 0 3 , a s

amended

b y e h . 1 5 ,

Public Laws

o f

1905.)

The Act of

Apr i l

4 , 1 9 2 3 ,

r e v i s i n g

a n d

c o n s o l i d a t i n g

t h e

banking laws, also uses

t h e

same wording

a s t h e

above quoted

1 9 15 p r o -

v i s i o n

i n

dea l ing wi th r ese rves

o f

t r u s t company members

o f t h e F e d -

e r a l Rese rve System. (Laws

of 19 23 , A c t

approved April

4 , 1923 , ch .

1 4 4 , s e c . 8 0 , p . 1 9 9 ;

Sanking

Law

Pamphlet ,

1 9 2 7 , s e c . 8 0 , p . 5 3 . )

MARYLAND.

Banks a n d trust companies may become members o f Federal Reserve System

b y

impl ica t io n; express ly permi t t e d

t o

carry only Federal Reserve

Act

r e s e r v e s .

T he

laws

o f

t h i s S t a t e

d o n o t

conta in

a n y

p r ov i s i ons

e x -

pr es s l y pe r mi t t i ng S t a t e banks a n d trust companies t o become members

o f t h e Federal Reserve System; b u t i t would seem that they impliedly

a r e

given this permiss ion

b y

l e g i s l a t i on enac ted

in 1918

pe r mi t t i ng

banks which

a r e

members

t o

carry only such reserves

a s a r e

r equi red

b y t h e

Federal Reserve

A c t .

This l e g i s l a t io n provides tha t

N o t -

wi ths tanding anyth ing

i n

th i s Ar t i c l e conta ined ,

a n y

bank i ng i n s t i t u -

t ion which

i s a

member

o f t h e

Federal Reserve System, shall

n o t b e

r e q u i r e d t o keep a n y r e s e r v e o r reserves other than those required

a n d

p r e s c r i b e d

f o r

banking ins t i tu t ions which

a r e

members

o f

said

Fe de ra l Res erv e System." (Laws

of 1918 , c h . 33 , s e c . 62 c ; An-

notated Code

o f

Maryland,

1 9 2 4 , A r t . 1 1 , s e c . 6 5 ;

Banking

Law Pam-

p h l e t ,

1 9 2 8 , s e c . 6 5 , p . 3 2 . )

T he

laws

o f

Maryland define

a

b a : ki n g i n s t i t u t i o n

t o

mean

incorpora t ed Banks , Savings Ins t i tu t i on s a n d Trust Companies, a n d

n o t t o

apply

t o p r

inc lude bui ld in g

a n d

loan as so ci at io ns ." (Laws

o f 1 9 1 0 , c h . 2 1 9 , s e c . 5 1 ;

Annotated Code

o f

Maryland,

1 9 2 4 , A r t .

1 1 , s e c . 5 2 ;

Banking

Law

pamphlet ,

1 9 2 8 , s e c . 5 2 , p . 2 7 . )

MASSACHUSETTS.

Trust companies impliedly authorized

t o

become members

o f

Federa l

R e -

serve System;

b u t

express ly permi t t e d

t o

comply wi th Fe de ra l Res erv e

A ct


i n

l i e u

o f

S t a t e

la w

requirements .

T he

laws

o f

t h i s S t a t e

d o n o t

make

a n y

d i s t inc t ion be tween

a so-called commercial bank and a trust company; a n d i n 1 9 1 4 , l e g i s l a -

t i o n

w as

enacted which impliedly authorizes trust companies

t o b e -

come members

o f t h e


b u t

expr ess ly per mit s

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

- is - 4 6 9

them t o comply With t h e rmsurve requirements of t h e Federal 3eserve

A c t i n s u b s t i t u t i o n o f t h e I'eqiii#

1

diluent8 d f t h e S t a t e l a v ; . (Laws o f

1 9 1 4 , c h . 5 3 7 , s e c . 1 ;

General taws,

c h . 1 7 2 ,

sees .

48 and. 81 ;

Bank-

ing Law

Pamphle t re la t i ng

t o

Trust companies,

1 9 2 9 , s e c . 4 8 , p . 2 4 ,

a n d s e c . 8 1 , p . 3 2 . )

MICHIGAN

Banks

a n d

t r us t companies t r an sa ct in g b .-nking busin ess auth ori zed

t o

purchase s tock

i n a

Federal

Ho

se rv e Bank.

I n 1 9 1 5 , t h e


o f

th i s S ta t e passed

a n a c t

authoriz ing ban.es

t o

purchase capi ta l s tock

i n a

federa l rese rve

bank,

o r d o an y

o th e r

a c t

r e q u i r e d

t o b e

done

b y a

bank

t o

become

a

member bank

* * * (P . A . 1 8 8 7 , Ac t 2 0 5 , so c . 4

( 7 t h ) ,

a s

amended

b y P . A . 1 9 1 3 , Ac t 1 1 an d P . A . 1 9 1 5 , A c t 2 5 ;

Comp. Laws

o f 1 8 9 7 , s e c .

6093 (7 th ) ,

a s

amended.)

T h e

s e c t io n

o f t h e

laws conta ining

t h e

above orovision

w as

amended

in 1 9 1 7 , 1 9 1 9 , 1 9 2 5 , an d 1 9 2 7 ; an d in 1 9 2 9 , t h e

l e g i s l a t u r e p a s s e d

a n a c t

r e v i s i n g

a n d

c o d i f y i n g

a l l o f t h e

laws

r e l a t i n g

t o

banking,

b u t

none

o f

these amendments changed

t h e

wording

o f t h e p ro v i s io n i n ques t ion . ( F o r 1 9 2 9 , l e g i s l a t i o n s e e P . A .

1 9 2 9 , Ac t 6 6 , so c . 4 (7th); Banking Law Pamohlet, 1 9 2 9 , s e c . 4

( 7 t h ) ,

p . 9 . ) ,

I t

w i l l

b e

noted that

t h e

"provis ions above referred

t o

spec i f ica l ly au thor ize on ly banks

t o

become members

o f t h e

Federal

He se rv e System; a n d t h e laws do n o t appear t o c o n ta in a n y p ro v i s io n s

e x p re s s ly a u th o r i z in g a trust company engaged solely i n t h e t r a n s -

a c t i o n o f a t ru s t b u s in e s s t o become a member. Fur th er mor e, i t i s

unders tood, that there a r e n o i n s t i t u t i o n s o f th i s genera l charac te r

which a r e n o w , o r which have ever been, members o f t h e System.

Trust Companies, however, a r e p e rmi t t e d to do a banking business ,

a n d

when they

do

engage

i n

such

a

b u s in e s s

i n

a d d i t i o n

t o

t h e i r

t ru s t b u s in e s s t h e y " sh a l l ,

a s t o

such bu si ne ss , have

a l l t h e

r i g h t s

a n d

b e n e f i t s

a n d b e

su b je c t

t o a l l t h e

a p p l i c a b le p ro v i s io n s

o f t h e

general banking

l a w . ( P . A . 1 9 2 9 , A c t 6 7 , s e c . 2 3 ;

Banking

Law

Pamphlet,

1 9 2 9 , s e c . 1 3 6 , p . 6 8 . )

Accordingly ,

i t

would seem that

t rus t companies t ransac t ing

a

banking business

may

become members

o f t h e


Reserves

o f

member fixed

b^r

Federa l Reserve

.Act an d n o t b y

S t a t e

l a w .

Th e 1 9 1 5

le g i s l a t io n a l so p rov ided "That

t h e

amount

o f

r e se rv e r e q u i r e d

t o b e

kept

o n

hand

b y a n y

such ba nk becoming

a

member bank under

t h e

said Federal Reserve

A c t

s h a l l

b e a s

f ixed

b y

s a id f e d e ra l r e se rv e

a p t o r a n y

amendment thereto,

a n d n o t a s

f i x e d

b y t h e

p r o v i s i o n s

of

t h i s

a c t . ( P . A . 1 8 8 7 , A c t S 0 5 , s e c .

4 ( 7 t h ) , a s amended b y P . A . 1 9 1 3 , A c t 1 1 , a n d P . A. 1 9 1 5 , Ac t 3 5 ;

Comp. Laws

o f 1 8 9 7 , s e c .

6093 (7 th ) ,

a s

amended.)

7/17/2019 frsbog_mim_v34_0450.pdf


X"6675

470

The

s ec t i on

o f t h e

laws containing

t h e

above provisions

w as

amended

in 1917 , 19 1° , 1 935 , and 1927 ; b u t

none

of

these

amendments changed

t h e

wording

of t he

p rov i s ions

i n

quest ion.

I n 1 9 2 9 , t h e l eg i s l a tu r e oa s sed n n a c t r e v i s i n g and

cod i fy ing a l l t h e l aws r e l a t i ng t o banking, a n d a l though t h e wording

o f t h e

above provision

i s

changed s l ight ly

t h e

e f f e c t

o f t h e p r o -

vision remains t h e same. The 1929 l e g i s l a t i o n pr o vi d es s p e c i f i c a l l y

"That t h e amount o f rese rve requi red to be kept on hand b y a n y bank

which i s a member o f t h e federal reserve system shal l b e a s f ixed

b y t h e f ede ra l r e se rve a c t o r a n y amendment thereto, a n d n o t a s

f i x e d b y t h e p rov i s ions o f t h i s a c t . ( P . A . 1 9 2 9 , A c t 6 5 , s e c .

2 1 ; Banking Law Pamphlet, 1 9 2 9 , s e c . 3 0 , p . 2 1 . ) A s stated above,

t rust companies t ransact ing a banking business apparent ly may b e -

come members o f t h e Federal Reserve System; a n d t h e provis ions

under which they may become such members would a l so seem t o au thor ize

them t o ca r ry rese rves i n accordance with t h e above quoted reserve

p rov i s ion .

MITOBSOTA.

Banks

a n d

tr u s t companies per mit ted

t o

become members

o f

f ede ra l

Reserve Bank.

On March 6 , 1 915 , an a c t o f t h e l e g i s l a t u r e o f th i s S ta te

w as

approved which provides that

Any

incorporated State bank

o r

trust company

may

become

a

member

o f t h e


of

t h e

Federal Reserve Dist r ic t

i n

which said bank

o r

trust company

i s

l o c a t e d

and may

inves t

i a a n d

hold stoc k th er ei n" . (Laws

o f

1915 , Ac t

approved March

6 , 1915 , ch . 28 , s ec . 1 ;

Kason's Minnesota

S t a t u t e s , 1 9 2 7 , s e c . 7649; Banking Law Pamphlet, 1 9 2 9 , p . 2 3 . )

No pr ov is io ns pe rm it t i ng compliance with Feder al Reserve A c t reserve

requirements i n l i e u o f S t a t e law requirements .

The

laws

o f

t h i s S t a t e

do no t

appear

t o

conta in

a n y p r o -

vis ions permit t ing State banks an d trust companies which a r e members

o f t h e Federal Reserve System t o main ta in rese rves requi red b y t h e

Federal Reserve Act in l i e u o f those required b y S t a t e l a w .

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

: 471

Miss i s s ip p i .

Banks and t r us t companies per mi t t ed t o become members o f F e d e ra l R e -

serve System,

An a c t o f t h e l e g i s l a t u r e o f t h i s St a te approved on March

9 , 1 9 1 4 ,

p rov ided tha t

n o

p a r t

o f t h e

s tock

of any

bank, exc ept

re gio nal res er ve banks, doing busi ness i n t h i s S t a t e , s h a l l b e owned

b y a n y bank under t h e p r o v i s i o n s o f t h i s a c t . (Laws o f 1 9 1 4 , c h ,

1 2 4 , A c t

approved March

9 , 1 9 1 4 , s e c . 6 4 ;

Miss. Code,

1 9 3 0 , s e c .

3821.)

I n 1 9 1 8 , t h e l e g i s l a t u r e o f t h i s S t a t e l e g i s l a t e d more

s p e c i f i c a l l y w i t h r e f e r e n c e

t o

membership

i n t h e

Federal Reserve

Sys tem. Tha t le g i s l a t io n p rov id es tha t a n y Sta te bank o r t r u s t

company "shall have power

t o

su b sc r ib e

t o t h e


a n d b e -

come a member o f a Federal Reserve Bank?

1

created under t h e Federal

Reserve A c t . (Laws o f 1 9 1 8 , c h . 2 4 8 ; Brown

1

s Mis s i s s ip p i a n d F e d -

o r a l S t a t u t e s , 1 9 2 5 , s e c . 8 7 , p . 8 3 ; Miss. Code, 1 9 3 0 , s e c . 3842.)

Reserves requ i red b y Federal Reserve Act may be main ta ined i n l i e u of

r e s e r v e s r e q u i r e d b y S t a t e l a w .

The 1918

l e g i s l a t i o n a ls o pro vid es th at member banks

and

• t r u s t companies s ha l l comply wi th t h e rese rve requ i rements o f t h e

Federal Reserve A ct a n d i t s amendments, a n d t h e compliance o f such

bank

o r

t r u s t company th er ew it h sh al l

b e i n

l i e u

o f , a n d

s h a l l

r e -

l i ev e such bank o r t r u s t company from , compliance wi th t h e p ro v i s io n s

o f t h e laws o f t h i s S t a t e r e l a t i n g t o t h e maintenance o f r e s e r v e s . "

(Laws

o f 1 9 1 8 , c h . 2 4 8 ;

Brown' s Mis s i s s ipp i

a n d

F e d e ra l S t a tu t e s ,

1 9 2 5 , s e c . 8 8 , p . 8 3 ; Miss. Code, 1 9 3 0 , s e c . 3843.)

MISSOURI.

Banks

a n d

Trust companies authorized

t o

become members

o f

Federal Reserve

Bank.

I n 1 9 1 5 , t h e General Assembly o f t h i s S t a t e e n ac t ed l e g i s l a -

t ion which authorized every bank t o purchase a n d h o ld , f o r t h e purpose

o f becoming a member of a Federal reserve bank, so much o f t h e c a p i t a l

s tock the reof a s w i l l q u a l i f y i t f o r membership i n such reserve bank

* * *. t

0

become a member o f such Federal reserve bank a n d t o have and

e x e r c i s e a l l powers, n o t i n c o n f l i c t w i t h t h e laws o f th is Sta te , which

a r e

con fer red upon

a n y

such member bank

b y t h e

'Federa l rese rve ac t*

a n d a n y amendments t h e r e t o . " (Laws o f 1 9 1 5 , p . 1 3 2 ; Rev ised S ta t s . ,

1 9 2 9 , s e c .

535$.)

T h e 1 9 1 5

l e g i s l a t i o n a l so c o n ta in e d s imi l a r p ro v i s -

ions authoriz ing t rust companies t o j o i n t h e Federal Reserve System.

7/17/2019 frsbog_mim_v34_0450.pdf


36-6875

*** 472

(Laws

o f 1 9 1 5 , p . 1 6 5 ;

Revised State ,

o f 1 9 2 9 , s e c . 5 4 2 1 ;

Banking

Law pamphlet , 1 9 1 9 , s e c . 1 1 7 89 ( 1 3 ) p . 9 8 . ) t h e s ec t i on o f t h e laws

con t a i n i ng

t h e

pro vis io ns cover ing banks

w as

amended

b y a n a c t a p -

proved March

2 3 , 1 9 2 7 , b u t t h e

por t ion author iz ing banks

t o

become

members

o f t h e


i s

unchanged. (Revised S t a t s . ,

1 9 2 9 , s e c .

5354; Laws

o f 1 9 2 7 , A c t

approved March

2 3 , 1 9 2 7 , s e c . 4 .

p . 2 1 9 . )

Member banks

a n d

trust companies only required

t o

maintain Federal

Reserve A ct r e s e r ves .

T he

General Assembly

o f 1 9 1 5

a l s o p a s s e d l e g i s l a t i o n

t o

t h e

e f f e c t t h a t

a n y

bank becoming

a

member

o f a


bank, a n d whi le i t co nt in ue s such member, sh a ll b e r e q u i r e d t o

maintain only such reserves

a s a r e

r e q u i r e d

b y t h e

Federal Reserve

A c t a n d a n y

amendments t h e r e t o " . (Laws

o f 1 9 1 5 , p . 1 5 5 ) .

This

l e g i s l a t i o n a l s o g r a n t e d

a

s imi lar permiss ion

t o

trust companies.

(Laws

o f 1 9 1 5 , p . 1 7 7 ) . T h e

s ec t i ons

o f t h e

laws containing these

provisions were amended i n 1 9 2 7 , b u t t h e wording o f t h e p r ov i s i ons

i n

ques t ion

i s

unchanged. (Revised S t a t s . ,

o f 1 9 2 9 ,

sees. a5360

a n d

a5432; Laas

o f 1 9 2 7 , A c t

approved March

2 3 , 1 9 2 7 , s e c . 6 , p . 2 2 7 ,

a n d A c t

approved April

5 , 1 9 2 7 , s e c . 3 , p . 2 4 2 . )

MONTANA.

Banks

a n d


t o

become members

o f

Federal

Reserve Bank.

B y a n a c t

approved March

5 , 1 9 1 5 , t h e


o f

t h i s

Sta te provided tha t

Any

bank

i s

hereby author ized

a n d

empowered

t o

j o i n o r a s s o c i a t e i t s e l f w it h t h e Nat ional Reserve Associat ion o f

t h e Un i t ed S t a t e s , o r a n y branch thereof , a n d no t h i ng he r e i n c o n -

t a ined sha l l prevent

o r

p r o h i b i t

a n y

bank f rom joining

o r

a s s o c i a t -

i n g

i t s e l f w it h

a n y

such as socia t ion

o r

branch thereof

o r

from

i n v e s t i n g

a n y

p a r t

o f i t s

c a p i t a l

o r

s u r p l us

i n t h e

s t ock

o f

such

a s s o c i a t i o n

o r

branch thereof ,

* * * .

(Laws

o f 1 9 1 5 , A c t a p -

proved March 6 , 1 9 1 5 , c h . 8 9 , s e c . 2 3 ) . Th is l e g i s l a t i o n de f i ned

a

"bank?

1

, wherever

i t w as

us ed t he r e i n ,

a s

i nc l ud i ng

a

t r u s t

com-

pany,

so

th at t r u s t companies app aren t ly were als o auth or i ze d

t o

j o i n

t h e

"Nat ional Reserve Associat ion"

b y t h e

above pr ov is io n.

(Laws o f 1 9 1 5 , A c t approved March 6 , 1 9 1 5 , c h . 8 9 , s e c . 2 ) .

T h e

above quoted provisions were

n o t

amended u n t i l March

8 , 1 9 2 7 ,

when

a n a c t

r e v i s i n g

a n d

c o d i f y i n g

t h e

banking laws

o f

t h i s S t a t e w as pas s ed . Th e new ban king code, however, d oes n o t

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

23

change t h e e f f e c t o f e i t h e r o f t h e p r o v i s i o n s , a n d t h e only change

made i n t h e p rov is ion au th or iz ing tanks a n d trust companies t o jo in

t h e Federal Reserve System, i s t o s u b s t i t u t e t h e term "Federal R e -

serve Bank" f o r t h e term "National Reserve Association o f t h e United

S ta t e s " a n d t h e word "Bank?

1

f o r t h e word "a ss oc ia ti on " wherever such

term o r words appeared i n t h e 1 9 1 5 pr ov is io n. (Laws of 1 927 , Ac t

approved March

8 , 192 7 , c h . 89 , s e s . 28 and 2 ;

Banking

Law

Pamphlet,

1 9 2 7 , sac 2 8 , p . 2 7 , a n d s e c . 2 , p . 7 . )

Compliance with reserve provisions deemed compliance with provisions

o f S t a t e l a w .

T h e a c t o f

March

6

a lso provided that

a n y

bank

o r

t r u s t

company "which shall become

a

member

o f t h e


Asso c ia t i o n , a n d s h a l l i n a l l re sp ec ts comply wit h t h e r u l e s and

r e g u l a t i o n s o f t h a t a s so c i a t i o n , sh a l l b e deemed t o have complied

w i t h t h e p r o v i s i o n s o f t h i s A c t . (Laws of 19 15 , Ac t approved

March 6 , 1 9 1 5 , c h . 8 9 , sees . 5 0 a n d 2 . ) I t would seem that this

p ro v i s io n a u th o r i z e d a compliance with t h e r e se rv e p ro v i s io n s o f

t h e Federal Reserve Ac t in l i e u o f t h e p r o v i s i o n s o f t h e S t a t e l a w .

I n 1 9 1 7 ,

tji 'e se ct io n

o f t h e

Montana laws containing

t h e

above provis ion

was

amended (Laws

of 19 17 , ch . 135 ,

s e c . l ) ,

b u t

this provision remained unchanged;

a n d i n 1 9 2 1 , t h e

s e c t i o n

was

f u r t h e r amended. This time t h e provision above quoted w as changed

so as s p e c i f i c a l l y t o p rov ide tha t a compliance with t h e f e d e ra l

reserve banking laws, ru les a n d r e g u l a t i o n s b y member banks ( a n d

t rus t companies) shal l b e h e ld to be a compliance with t h e rese rve

requ i rements

a n d

c o n d i t i o n s

o f

t h i s

a c t , a nd

e n t i t l e such Federa l

reserve member banks

( a n d

trust companies)

t o t h e

r i g h t s

a n d

p r i v i -

leges accruing from a compliance wit h th i s a c t . (Laws of 19 21 , c h .

9 4 , s e c . 1 . )

I n 1 9 2 7 , t h i s p ro v i s io n w as again amended b y a u a c t a p -

proved March 8 , 1 9 2 7 , r e v i s i n g a n d c o d i fy in g t h e banking laws o f

t h i s S t a t e , b u t t h e e f f e c t o f t h e p ro v i s io n i s t h e same. The

ne w banking code provides i n p a r t t h a t a compliance with t h e F e d -

er al res er ve banking laws, ru le s

a n d

r e g u l a t i o n s

b y

member banks

( a n d t r us t companies) sh al l b e h e ld to be a compliance with t h e

rese rve requ i rements a n d c o n d i t i o n s o f t h i s A c t . (Laws of 192 7 ,

A c t approved March 8 , 1 9 2 7 , c h . 8 9 , sees . 53 and 2 ; Banking Law

Pamphlet, 1 9 2 7 , s e c . 5 3 , p . 3 6 , a n d s e c . 2 , p . 7 . )

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

« 2l4 -

1

i 4

NEBRASKA.

Banks a n d tr u st companies aut hor ize d t o become members, but no t now

express ly author ized t o maintain reserves i n accordance with Federal

Reserve

A ct

i n s t ead

o f in

accordance with State

l a w .

B y a n a c t approved April 12 , 1915 , the l e g i s l a t u r e o f th i s

Sta te provided tha t a n y bank o r t r u s t company, inc or po ra te d under

t h e laws o f t h i s s t a te sh al l have power t o subscr ibe t o t h e cap i t a l

s tock , a n d become a member, o f a federal reserve bank * * * and sha l l

have power t o as sume such l i ab i l i t i es and to ex er ci se such powers

a s a member o f such fe de ra l res erv e bank a s a r e p r e s c r i b e d by the

pr ov i s i ons o f s a i d a c t , o r amendments thereto; a n d , s o long a s such

bank shall remain a member o f t h e federal reserve sys tem * * *,

i t

s h a l l

b e

s u b j e c t

* * * to a l l p r o vis ions o f said,

f e de ra l r ese rve

a c t a n d

regulat ions made

pursuant thereto t>y the federal reserve

board which

a r e applicable t o such banla $ » «»inber« o f t h e federal

reserve system;

* * » (laws o f 1 9 1 5 * a p p r o v i f t April 12+

1 9 1 5 , c h . 1 7 5 , s e c . l y p * 359*)

f h&t

a c t $ a d e

of member banks and trust companies maintaining th e reserves required

by the

federal Reserve

Act in

l i e u

of

thorn# re#iy#&

by the

State

law . - •

Under date o f March 1 9 , 1 9 1 9 , a n a c t o f t h e l e g i s l a t u r e

was

approved repeal ing

t h e

above pro vis i ons ;

b u t ,

except

f o r

omit -

t i n g

a n y

r e f e r e n c e

t o a

trust company

a nd

except

f o r

inc luding

a

provi s ion provid ing tha t

a

compliance

by a

bank with

t h e

r eserve

p r o v i s i o n s

o f t h e

Federal Reserve

A ct

relieved such bank from comply-

i n g

wi th

t h e

r e s e r ve p r ov i s i ons

o f

S t a t e

l a w ,

t h i s

a c t

r ead p r e c i s e -

l y t h e same as th e 1915 pr ov is io ns above quoted. (Laws of 1919 ,

A ct approved March 1 9 , 1 9 1 9 , c h . 1 6 , p . 7 7 . ) T h e 1 9 19 a c t , with

r e f e r e n c e

t o

r e s e r ves , s pe c i f i c a l l y p r ovi ded t ha t

Any

bank comply-

i n g wi th t h e reserve requirements o f the f ede r a l r e s e r ve a c t , a n d

i t s amendments, shall b e rel ieved from compliance with t h e p r o -

v i s i ons o f t h e laws o f t h i s s t a t e r e l a t i n g t o t h e maintenance o f

r eserves" .

On Apr i l 19 , 1919 , another a c t w a s approved which was

e n t i t l e d t h e Civil Administrat ive Code

11

, a n d which, although i t

r epea l ed the Ac t o f March 19 , 1919 , contained a sect ion (Sect ion

6 4 ) r eading t h e same a s t h e r epea led a c t r ead . In a d d i t i o n , t h e

Act o f Apr i l 1 9 , 1 9 1 9 , conta ins a sec t ion ( sec t ion 65) r e s t o r i n g

t o trust companies t h e r i g h t t o j o i n t h e Federal Reserve System;

b u t i t does n o t conta in a provi s io n s imi lar t o t h e provision which

w as included i n s ec t i on 64 relieving banks from complying with

S t a t e

l a w


i f

they observe d Fed era l Reser ve

7/17/2019 frsbog_mim_v34_0450.pdf


- g $ -

3t-6875

: 475

A c t

re se rv e req uir eme nts . (Laws

of 191 9 , Ac t

approved April

1 9 ,

1 9 1 9 , c h . 1 9 0 , a r t . X V I ,

sees .

6 4 a n d 6 5 , p p . 7 1 1 a n d 7 1 2 . )

On

Apr i l

14 , 1921 , an a c t was

approved which repeals

s ec t i on

64 o f t h e Ac t o f

Apr i l

1 9 , 1 9 1 9 .

This

a c t

r e t a i n s

t h e

pr ov i s i ons au t hor i z i ng banks

t o

j o i n

t h e


b u t i t

does

n o t

r e t a i n

t h e

p r ov i s i on au t hor i z i ng

a

compliance with

t h e


o f t h e

Federal Reserve

Ac t in

l i e u

o f t h e


o f

S t a t e

l a w .

( laws

o f 1 9 2 1 , p . 9 5 3 . )

No

other amendments appear

t o

have been made

t o t h e

laws

o f

t h i s St at e coveri ng membership

i n t h e


a n d t h e

r e s e r ves r equ i r ed

o f

such members;

a n d i t

appears that

a t t h e

present t ime both banks

a n d

trust companies

a r e

author ized

t o

s ubs c r i be

t o

s tock

i n a n d

become members

o f a

Federa l r eserve

bank

b u t

tha t they

a r e n o t

s p e c i f i c a l l y a u t h o ri z e d

t o

ma i n t a i n

r e -

serves

i n

accordance with

t h e

Federal Reserve

A c t

i n s t e a d

of i n

accordance wi th State

l a w . T h e

p r e s e n t

l a w o n

th i s subjec t wi l l

a l s o b e found i n t h e 1 9 2 9 Compiled Statutes o f Nebraska, sees.

8 - 1 6 2 a n d 8-163, p p . 1 1 4 a n d 1 1 5 .

NEVADA.

Banks a n d t rus t companies author ized t o become members o f Federal Reserve

Bank.

I n 1 9 1 9 , t h e l e g i s l a t u r e o f t h i s S t a t e enac ted l e g i s l a -

t ion which provides i n pa r t t ha t an y State bank o r trust company

"shal l have t h e power t o s ubs c r i be t o t h e c a p i t a l s t o c k a n d become

a member o f a Federal Reserve Bank?

1

. (Acta o f 1 9 1 9 , c h . 1 2 6 , s e c .

2 , p . 2 4 1 ; Banking Law Pamphlet , 1 9 2 7 , s e c . 2 , p . 3 4 . )

Federal Reserve A c t r e s e r v e s may be maintained i n l i e u o f r eserves

r e q u i r e d

b y

S t a t e

law . .

T h e 1 9 1 9 a c t also provides that a compliance b y a member

bank

o r

t r u s t company wit h

t h e


o f t h e

Federal

Reserve A c t " s h a l l b e he l d to be a ful l compliance with those p r o -

v i s i o n s

o f t h e

laws

o f

this State which require banks

o r

t r u s t

companies

t o


i n

t h e i r v a u l t s

o r

wi th other

banks ,

and no

such bank

o r

t r u s t company sh a ll

b e

r e q u i r e d

t o

car ry

o r

maintain reserve other than such

a s i s

r equi red under

t h e

terms

o f t h e


a c t .

(Acta

o f 1 9 1 9 , c h . 1 2 6 , s e c . 4 , p ,

2 4 1 ;

Banking

Law

Pamphlet ,

1 9 2 7 , s e c . 4 ,

p .

3 4 . )

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

* » ' : 4 7 6

NW HAMPSHIRE.

Trust companies

may

become members

o f


b y

implica-

ti on ; e xp re ss ly -permitted, t o carry only Federal Reserve A ct reserves*

The

laws

o f

t h i s S t a t e

d o n o t

conta in

a n y

p rov i s ions

e x -

press ly permi t t ing e i ther banks o r trust companies t o become members

o f t h e

Federal Reserve System;

b u t

trust companies

a r e

impliedly

g iven th i s r igh t

b y

leg i s la t ion which

was

enacted

i n t h e

year

1915 ,

a n d which subjects them t o t h e reserve requirements o f t h e Federal

Reserve

A c t

i n s t ead

o f t h e

S t a t e

l a w

res erv e requi remen ts. This

l e g i s l a t i o n p r o v i d e s i n pa r t t ha t A t r u s t company which becomes a

s tockholder

i n a

f ed er al rese rve bank with in

t h e

ifederal reserve

district where such trust company

i s

s i t u a t e d

may

have

a n d

exercise

a n y a n d a l l o f t h e corporate powers a n d p r i v i l ege s i nc iden t t he re to ,

which

may be

exerc i sed

b y

member banks

* * * ; and

while such t r u s t

company continues

a s a

member bank under

t h e

p rov i s ions

o f

said

f ede ra l r e se rve a c t , o r a n y a c t s i n amendment thereof, i t s h a l l b e

subjec t

t o t h e

p rov i s ions t he reo f r e l a t i ve

t o

bank reserves" ,

i n

s u b s t i t u t i o n

f o r t h e

S t a t e

la w

re se rv e req uir emen ts. (Laws

o f

1 9 1 5 , c h . 1 0 9 , s e c . 2 8 ; P u b . Laws, c h . 2 6 4 , s e c . 7 ; Banking Law

Pamphlet,

1 9 2 9 , s e c . 7 , p . 3 2 . )

Banks

a n d

trust companies authorized

t o

purchase stock

i n

Federal

Reserve Bank. /

I n

a n a c t

approved April

1 4 , 1 9 1 4 , t h e


of

th i s

s ta te p rovides tha t

a n y

State bank

o r

trust company

may

become

a

member

o f t h e


o f t h e

Federa l rese rve d i s t r ic t

i n

which such bank

o r

trust company

i s

l oca t ed ,

and may

subscr ibe

f o r , purchase, hold an d sur ren der , from time t o time, such amounts

o f t h e

cap i ta l s tock

of

such federal reserve bank

a s

such t rust

company

o r

s ta te bank

may

deem advisable,

or a s may be

requi red

under said

'

f ede r a l r e se rve

a c t

1

, o r any

amendment thereof,

i n

order

t o

ob t a in

a n d

continue such membership,

a n d

upon

t h e

purchase

o f

such stock, t o assume t h e l i a b i l i t i e s a nd become entit led t o t h e

b e n e f i t s r e c i t e d

i n

sa id ' f edera l rese rve ac t f«

n

(Laws

o f 191 4 ,

A c t approved April 1 4 , 1 9 1 4 , c h . 1 5 9 , s e c . 1 ; Banking Law Pamphlet,

1 9 3 0 , p . 1 3 6 . )

Federal Reserve

Aqt

reserve requirements substituted

f o r

State

law

requirements.

In an act approved March 2 9 , 1 9 1 7 , member banks and trust

7/17/2019 frsbog_mim_v34_0450.pdf


Xr68?5

4 t : 4 7 7

e o # a n i e s a r e made subject t o t h e provisions of the federal reser ve

a c t a n d a n y amendments thereto relative t o bank reserves, in sub-

s t i t u t i o n

f o r t h e

requirements

o f t h e

laws

o f

this State concerning

bank reserves f o r trust companies o r state banks n o t members of the

fed eral re ser ve b a n # . (Laws

of 19 17 , Act

approved March

29 , 1 917 ,

c h . 225, s e c . 1 ; Banking Law Pamphlet, 1 9 3 0 , p . 1 3 7 , )

NBff MEXICO.

.Hanks a n d trust companies authorized to purchase stock i n Federal

Reserve Bank.

B y a n a c t

approved March

1 5 , 1 9 1 5 , t h e


o f

th is

S ta te provided tha t Any incorporated State bank may apply t o t h e F e d -

eral Reserve Board

f o r t h e

r i g h t

to

subscr ibe

t o t h e

s tock

o f t h e Fe d -

eral Reserve Bank organized within t h e Federal Reserve District where

t h e applicant bank i s l o c a t e d , and may become a s tockholder o f such

bank a n d exe rc i se a l l of t h e powers o f monitor banks i n accordance

with t h e p r o v i s i o n s of t he Ac t o f Congress entitled 'Federal Reserve

A c t ' , approved December 2 3 , 1913" . (Laws of 19 15 , A c t approved March

1 5 , 1 9 1 5 , c h . 6 7 , s e c . 9 5 . ) T he laws of th is S ta te des ignate t h e p r o -

vis ion s cove ring banking a s t h e "Bank A c t a n d pro vid e th at wherever t h e

word "Bank" i s used i n t h e A c t i t incl ude s t r u s t companies. (Laws o f

1 9 1 5 , c h . 6 7 , s e c . 2 ;

Hew-Mexico Statutes, Annotated,

1 9 2 9 , s e c .

13-102;

Banking Law Pamphlet, 1 9 2 9 , s o c . 2 , p . 5 . )

- I n 1 9 1 9 , t h e l eg i s l a tu re incorpora ted t h e above quoted

v

prov i s ion i n p r e c i s e l y t h e same language i n o t h e r l e g i s l a t i o n i t

enacted covering member banks an d t r u s t companies. (Laws of 1919 ,

ch. 120, sec . 35; N#w Mexico St at u te s , Annota ted, 1 9 2 9 , s e c . 13-701;

Banking Law Pamphlet, 1 9 2 9 , s e c . 9 6 , p . 3 2 . )

Compliance wit h r es er ve r equir ements of Federal Reserve A c t c o n s t i t u t e s

compliance with reserve requirements of S t a t e l a w .

I n 1 9 1 9 , t hi s St at e enacted le gi sl at io n which prov ides

t h a t a compliance b y a member bank o r t r u s t company "wi th t h e reserve

requirements o f t h e Federal Reserve A ct s h a l l b e he ld to be a f u l l

compliance with these provisions o f t h e laws o f this State which

requi re banks o r trupt companies t o maintain cash balances i n t h e i r

v a u l t s

o r

with other banks,

and no

such bank

o r

trust company shall

b e r equ i red t o c a r r y o r maintain reserve other than such a s i s r e -

quired under

t h e

terms

o f t h e

Federal Reserve

A c t .

(Laws

of 191 9 ,

ch . 120 , sec . 35 ; New Mexico St a tu t es , Annotated, 1 9 2 9 , s e c . 13-702;

Banking Law Pamphlet, 1929 , se c . 97 , p . 32 . )

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

** * 478

N W YORK.

Banks a n d t rust companies authorized t o purchase s tock i n Federal He ser ve

Bank, ' ' ~ .

I n 1 9 1 4 , t h e laws o f t h i s St at e were amended so a s to

a u t h o r i z e a bank o r trust company To purchase a n d ho ld , f o r t h e

purpose o f becoming a member o f a federa l rese rve bank , so much

o f t h e

c a p i t a l s t o c k th e re o f

a s

w i l l q u a l i f y

i t f o r

membership

i n such reserve bank * * *; to become a member o f such fe de ra l r e -

serve bank,

a n d t o

have

a n d

e x e r c i s e

a l l

powers,

n o t i n

c o n f l i c t

w i th t h e laws o f th i s s ta te , which a r e con fer red upon a n y such mem-

b e r bank b y t h e f e d e ra l r e se rv e a c t . (Banking L a w , s e c . 1 0 6 , subd.

4 a n d s e c . 1 8 5 , subd. 1 2 ; Laws o f 1 9 1 4 , c h . 3 6 9 , s e e s . 106 and 185 ;

Banking Laws, 1 9 3 0 , s e c . 1 0 6 , p . 6 9 , a n d s e c . 1 8 5 , p . 1 4 7 . ) Sect ion

1 0 6 o f t h e

Banking

Law was

amended

i n 1 9 1 8 , 1 9 1 9 , 1 9 2 1 , a n d 1 9 2 6 , b u t

none o f these amendments changed t h o wording o f t h e provis ion above

quoted.

Compliance with Federal Reserve A c t reserves deemed c ompli ance wit h

S t a t e l a w .

I n 1 9 1 4 , t h e reserve laws covering banks were amended so

a s t o

p ro v id e th a t ,

I f a n y

bank shall have become

a

member

of a

federa l rese rve bank , i t may main ta in a s r e s e r v e s on deposi t with

such federal reserve bank such port ion

of i t s

t o t a l r e s e r v e s

a s

s h a l l b e r e q u i r e d o f members o f such federal reserve bank; a n d i f

such bank h a s a n o f f i c e i n a borough having a p o p u la t io n of two

m i l l i o n s

o r

o v e r ,

t h e

remainder

of i t s

t o t a l r e s e r v e s s h a l l

b e

c a r r i e d a s r e s e r v e s on hand ." (Banking Law, s e c . 112 , subd. 3 ;

Laws o f 1 9 1 4 , c h . 3 6 9 . )

Subd. 3 o f s e c . 112 o f ch . 369 o f t h e Laws of 1914 was

amended

by ch . 579 o f th e

Laws

o f 1 9 1 7 ,

e f f e c t i v e

May 21 , 19 17 ,

b u t this amendment d i d n o t change t h e wording o f t h e p ro v i s io n

quoted above.

Subd. 3 o f s e c . 112 o f ch . 369 o f t h e Laws of 1914 a s amend-

ed by ch . 579 o f th e

Laws

of 191 7 , was

again amended

b y c h . 9 2 o f t h e

t h e Laws o f 191)3, e f f e c t i v e March 2 7 , 1 9 1 8 , t o read a s fo l lows:

* * * i f any bank shall have become a member of a

federa l rese rve bank , i t may main ta in a s r e se rv e s

on

hand with such fe de ra l re se rve bank such po rt io n

o f i t s t o t a l r e s e r v e s a s s h a l l b e r e q u i r e d of mem-

b e r s o f such fe de ra l re ser ve bank."

T he p r o v i s i o n s o f t h e se ct io n quoted above were f u r t h e r

amended

b y c h . 3 5 ,

Laws

o f 1 9 1 9 ,

e f fe c t iv e March

6 , 1 9 1 9 , t o

read;

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

•* 29 -

* * * b u t , i f a n y

bank shall have become

a mem-

b e r o f a

federa l rese rve bank ,

i t

sha l l ma in ta in

such reserves with such federal reserve bank

a s

a r e r e q u i r e d b y t h e f e d e ra l r e se rv e a c t a n d s o

long

a s i t

complies wit h

t h e

requirements

o f

such

fe d e ra l r e se rv e

a c t

wi th r e f e r e n c e

t o

rese rves

s h a l l

b e

exempt from

t h e

p reced ing p rov is ions

o f

t h i s s e c t io n . "

There have been

n o

changes

i n

subd.

3 o f s e c . 1 1 2 o f c h . 3 6 9

o f t h e

Laws

o f 1 9 1 4

s in c e

1 9 1 9 .

I n 1 9 1 4 t h e

reserve laws covering trust companies were also

amended so as t o p rov ide tha t I f a n y trust company shall have

become

a

member

o f a


i t may

main ta in

a s r e -

se rves

o n

dep osi t with such fe de ra l res erv e bank such po rt io n

of i t s

t o t a l r e s e r v e s a s s h a l l b e r e q u i r e d o f members o f such fe der a l r e -

serve". (Banking L a w , s e c . 1 9 7 , subd. 3 ; Laws o f 1 9 1 4 , c h . 3 6 9 . )

T h e

p r o v i s i o n s

o f

subd.

3 o f s e c . 1 9 7 o f c h . 3 6 9 o f t h e

Laws

o f 1 9 1 4

were also amended

b y ch . 5 7 9 o f t h e

Laws

o f 1 9 1 7 ,

e f f e c t i v e

May 2 1 , 1 9 1 7 , b u t this amendment d i d n o t change t h e wording o f t h e

provision above quoted.

Subd.

3 o f s e c . 1 9 7 o f c h . 3 6 9 o f t h e

Laws

o f 1 9 1 4 as

amended

b y c h . 5 7 9 o f t h e

Laws

of 1 917 , was

further amended

b y ch . 9 2 o f t h e

Laws

o f 1 9 1 8 ,

e f fe c t iv e March

2 7 , 1 9 1 8 , t o

read

i n

p a r t :

11

* * * i f any trust company shall have become

a member o £ a federa l rese rve bank , i t may main-

t a i n

a s

r e s e r v e s

on

hand with such federal

r e -

serve bank such portion

o f i t s

t o t a l r e s e rv e s

a s

s h a l l

b e

r e q u i r e d

o f

members

o f

such fe de ra l

reserve bank."

T h e

p r o v i s i o n s

o f t h e

section quoted above were further amend-

e d b y c h . 3 5 o f t h e Laws o f 1 9 1 9 , e f fe c t iv e March 6 , 1 9 1 9 , t o read i n

p a r t :

ti * * * t u t i f a n y

trust company shall have

b e -

come

a

member

o f

a ' f e d e ra l r e se rv e b an k,

i t

shal l mainta in such reserves with such federal

rese rve bank a s a r e r e q u i r e d b y t h e f e d e r a l r e -

se rve

a c t a n d s o

long

a s i t

complies wit h

t h e

requ i rements

o f

such fed era l rese rve

a c t

with

r e f e r e n c e

t o

r e se rv e s sh a l l

b e

exempt from

t h e

p re c e d in g p ro v i s io n s

o f

t h i s s e c t io n . "

7/17/2019 frsbog_mim_v34_0450.pdf


• 4 8 0

X-6875

- 30 -

There have been no changes i n subd. 3 o f s e c . 197 o f ch .

369 o f the Laws of 1914 s in c e 1919 .

UORTH CAROLINA.

Banks

a n d

t rust companies receiving deposi ts authorized

t o

become

members

o f


T he l e g i s l a t u r e o f t h i s S t a t e d i d n o t e n a c t l e g i s l a t i o n

s p e c i f i c a l l y p e r m i t t i n g b a n k s a n d trust companies t o become

members o f t h e Fed era l Reserve System u n t i l March 1 0 , 1 9 1 9 , when

a n a c t w a s r a t i f i e d p ro v id in g " T h a t a n y bank o r trust company

incorpora ted under t h e laws o f th i s S ta te sha l l have t h e power

t o subscr ibe t o t h e cap i t a l s tock a n d become a member of a

Fed era l Rese rve Bank". (P ub li c Laws o f 1 9 1 9 , c h .

252,

s e c .

2 , p . 461 . )

Qn February 1 8 , 1 9 2 1 , another a c t w a s r a t i f i e d w h i c h r e -

p e a l s t h e above quoted provision a n d which provides "That a n y bank

7/17/2019 frsbog_mim_v34_0450.pdf


* ii *

X-6875

4 8 1

incorporated under

t h e

laws

o f

th is Sta te shal l have

t h e

power

t o

su b sc r ib e

t o t h e


an d

become

a

member

o f a

Federa l

R e -

se rv e Bank*. (P ub li c Laws

of 192 1 . ch . 4 , s e c . 42 , p . 91 ;

North

Carolina Code, 1 9 2 7 , A n n . , s e c . 220(g) ,p . 63 ; Banking Law Pamphlet,

1 9 2 7 , s e c .

220(g) ,

p . 2 5 . )

The 1921 ac t fu r t h e r p ro v id e s t h a t T he words 'member

bank* shall b e h e l d t o mean a n y National o r Sta te bank o r bank and

t r u s t company which h a s become o r which becomes a member of one of

t h e Federal Reserve Banks created b y t h e Federal Reserve A c t .

(public Laws

of 1921 , ch . 4 , s ec . 42 , p , 91 ;

North Carolina Code,

1 9 2 7 , A n n . , s e c .

220(g); Banking

Law

Pamphlet,

1 9 2 7 , s e c .

220(g),

p . 2 5 . ) T h e laws o f North Carol ina a lso provide that T h e term

i 'b an k' when us ed i n t h i s a c t s h a l l b e cons t rued t o mean a n y c o r -

p o r a t i o n , p a r t n e r s h i p , f i r m , o r i n d iv id u a l r e c e iv in g , so l i c i t i n g ,

o r accepting money o r i t s egu iva len t on depos i t a s a bus iness :

Prov ided , however , th i s de f in i t ion sha l l n o t b e cons t rued t o i n -

c lude * * * trust companies n o t receiving money on depos i t . "

(North Carolina Code,

1 9 2 7 , A n n . , s e c .

216(a); Banking

Law

Pamphlet,

1 9 2 7 , s e c . 2 1 6 (a ) , p . 3 . ) I n view o f t h e s e d e f i n i t i o n s , i t would

seem that t h e r i g h t of trust companies, a t least , t rus t companies

r e c e i v i n g d e p o s i t s , t o j o i n t h e Federal Reserve System i s n o t taken

away b y t h e above guoted provision o f t h e 1 9 2 1 a c t , even though

th a t a c t sp e c i f i c a l ly a u th o r i z e s o nly b an ks t o become members and

r e p e a l s t h e original enactment (1919) which expressly authorized

both banks

a n d

trust companies

t o ^ o i n t h e

System.

Members o f Federal Reserve System only required t o maintain Federal

Reserve A c t r e se rv e s .

I n a n a c t which w as r a t i f i e d on February 1 9 , 1 9 1 9 , t h e

General Assembly o f th i s S t a te p rov ided tha t Any bank that i s

now or may hereaf ter become a member of a Federal Reserve Bank

sha l l ma in ta in

t h e

same re se rv es with re sp ec t

t o

d e p o s i t s

a s

sha l l

b e

r e q u i r e d

o f

other members

o f

such Federal Reserve Bank."

( P u b -

l i c

Laws

of 1919 , Ch. 58 , s e c . 1 , p . 77 . )

An add i t ion a l p rov i s ion cover ing res e rve s of members o f

t h e Federal Reserve System was a lso i ncluded i n a n a c t which was

r a t i f i e d on Marc}} 1 0 , 1 9 1 9 . That a c t provided that A compliance

o n t h e p a r t of any such bank o r t r u s t company wi th t h e r e s e r v e r e -

quirements o f t h e Federal Reserve A c t s h a l l b e he ld to be a f u l l

compliance with those provis ions o f t h e laws o f this State which

require banks o r trust companies t o maintain cash balances i n t h e i r

v a u l t s

o r

with other banks,

and no

such bank

o r

trust Company shall

b e

r e q u i r e d

t o

c a r r y

o r


a s i s r e -

quired under t h e terms o f t h e Federal Reserve A c t . (P ub li c Laws

o f 1 9 1 9 , c h . 2 5 2 , s e c . 4 . p . 4 6 2 . )

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

4 3 2 -

Both o f t h e above cuj teu reserve provis ions a r e repealed

b y a n a c t which w as r a t i f i e d on February 18 , 1921 (Public Laws o f

1 9 2 1 , c h . 4 , s e c . 3 1 , p . 8 3 , a n d s e c . 4 2 , p . 9 2 ; North Carolina

Code, 1 9 2 7 , A n n . s e c . 2 2 0 ( f ) , p . SO, and sec . 220(g) , p . 6 2 ; Banking

Law Pamphlet, 1 9 2 7 , s e c . 2 2 0 ( f ) , p . 3 1 , a n d s e c . 220(q) , p . 2 5 . )

However, this a c t incorporates almost word f o r word t h e provis ion

o f t h e a c t which w as r a t i f i e d on February 1 9 , 1 9 19 ; a n d , i t s u b -

s t an t i a l l y i nco rpo ra t e s a l so t h e language o f t h e provision which

w as r a t i f i e d on March 10 , 1 919 , a l though i t f a i l s to make a n y e x -

press mention o f a t r u s t company. This f a i l u r e t o mention a t r u s t

company, however, does n o t take away t h e r i g h t o f a member t r u s t

company receiving deposits t o ca r ry rese rves i n accordance with

t h e requirements o f t h e Federal Reserve A c t i n s t ead o f i n , a c c o r d -

ance with t h e requirements o f S t a t e l a w , because i f t h e d e f i n i t i o n s

s e t forth above permit such company t o become a member o f t h e F e d -

e r a l Rese rve System under t h e membership provisions they obviously

permit such company also, i f i t i s a member, to ca r ry r e se rves i n

t h e same manner a s a member bank under t h e r e se rve p rov i s ions o f

t h e 1 9 2 1 a c t .

NORTH DAKOTA.

Banks expressly permitted

t o

become members

o f


A n a c t approved February 10 , 1915 conta ins provis ions p r o -

h i b i t i n g

a

b ank fpom us in g

i t s

a s s e t s

i n

ce r ta in inves tments ,

b u t

these prov is io ns provide tha t such pro hib i t i ons " s ha l l

n o t b e c o n -

s t rued

as in any way

p r even t ing

a

bank from investing such part

o f

i t s

funds

i n

s t ock

o f t h e


o f

t h i s d i s t r i c t

as may be

neces sa ry

t o

become

a

member

o f t h e

Federal Reserve Associa-

t i o n

an d

from carrying such stock among

i t s

as se ts ." (Laws

of 1915,

A c t approved February 10 , 1915 , ch . 54 , se c . 1 ; Supplement t o t h e

1 9 1 3

Compiled Laws

o f

North Dakota, (1913-1925),

s e c . 5 1 8 7 ;

Banking

Law Pamphlet, 1 9 2 9 , s e c . 5 1 8 7 Supp., p . 2 5 . )

No provi s ions sp ec i f ic a l ly au thor i z ing t ru s t companies t o purchase

s tock i n Federal Reserve Banks.

The

laws

o f

this State do not appear

t o

conta in

a n y p r o -

v i s i o n s s p e c i f i c a l l y permitting o r authorizing trust companies

t o

become members

o f

t h e Federal Reserve System,

a n d i t i s

understood

t h a t

a £ t h e

p r e sen t time there are no trust companies

i n

th i s S ta te

which

a r e

members o f t h e System; n or have such companies been members

a t a n y t ime

i n t h e p a M .

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

No

pro vis ion s perm it t i ng compliance with res erv e requirements

of

Federal

Reserve Ac t i n l i e u o f requirements o f S t a t e Law.

There a r e n o p rov i s ions i n t h e laws of this Sta te under

which

a

State member bank

may

ca r ry

t h e

r e se rves p r e sc r ibed

b y t h e

Federal Reserve Ac t i n l i e u o f t h e r e se rves p r e sc r ibed b y S t a t e l a w .

OHIO.

Banks and trust companies authorized t o join Federal Reserve System.

By an Act approved February 1 7 , 1 9 1 4 , t h e L e g i s l a t u r e o f

t h i s St at e aut ho riz ed every Ohio cor por ati on havin g power t o rece ive

a n d receiving money on depos i t , except bu i ld in g an d loan assoc ia t ions ,

t o become members o f t h e Federal Reserve System, t h e p r o v i s i o n s i n

th is connect ion providing that a n y such corporation i n add i t i on to t he

powers , r igh ts

a n d

p r iv i l eges pos se s sed

b y i t

under

t h e

laws

of

Dhi6

shall have t h e r i g h t a n d power t o become a member bank.under t h e F e d -

eral Reserve A ct upon t h e terms a n d condi t ions s e t f o r t h i n s a id F e d -

eral Reserve

A c t , o r

he rea f t e r p rov ided

b y l a w , i n

order

t o

become

a

member bank a s contemplated b y said Federal Reserve A c t . (Laws of

1.914, A ct approved February 17 , 1914 , s ec . 2 ) .

On Apr i l 1 1 , 1 9 1 9 , a new banking Code f o r

this State

was

approved,

and

pr ov is io ns covering membership si mi la r t o those r e -

f e r r e d t o

above

a r e included i n t h e Code. The Code spec i f ica l ly

p rov ides

i n

pa r t t ha t "Every bank,

i n

add i t i on

t o t h e

powers , r i gh ts

a n d p r iv i l eges pos se s sed b y i t under t h e laws o f Ohio shall have

t h e r i g h t a n d power t o become a member bank under t h e federa l rese rve

a c t

upon

t h e

terms

^ n d

condi t ions

s e t

f o r t h

i n

sa id federa l rese rve

a c t , o r he rea f t e r p rov ided b y l a w . Eve ry bank which becomes a mem-

b e r bank shall have t h e r i g h t a n d power to do every th ing requi red o f

o r

gran ted

b y

sa id federa l rese rve

a c t t o

member banks which

a r e

organ ized under st a t e laws; * * * . (Gene ra l Code o f Ohio, s e c .

710-5; Banking

Law

Pamphlet,

1 9 2 8 , s e c .

710-5,

p . 7 . )

The laws also provide that T h e term 'Bank' sh al l inc lud e

a n y

pe r son , f i rm , a s soc i a t i on ,

o r

co rpo ra t i on so l i c i t i ng , r e ce iv -

i n g o r accepting money, o r i t s equ iva l en t , on depos i t a s a bus ine s s ,

whether such deposit i s made subject t o check o r i s evidenced by a

c e r t i f i c a t e of depos i t , a pass-book, a no t e , a r e c e i p t , o r other

w r i t i n g ,

a n d

u n l e s s

t h e

contex t o therwise requi res

a s

used

i n

t h i s

a c t in cl ud es commercial ban ks, s avin gs banks , t r u s t companies and

unincorporated banks; * * *

11

. (General Code o f Ohio, s e c . 710-2;

Banking

Law

Pamphlet,

1 9 2 8 , s e c .

710-2,

p . 5 . )

Tr us t companies,

t h e r e f o r e , may become members o f t h e Federal Reserve System, under

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

484

T h e a c t approved. Feb rua ry 1 7 , 1 9 1 4 , conta ined a p r ov i s i on

t o t h e

e f f e c t t h a t

a

coraoliance

b y

member banks

a n d

trust companies

wi th t h e r eserve requi rements o f t h e Federal Reserve A c t " s h a l l b e

accep t ed i n l i e u o f t h e r eserve requi rements provided b y t h e laws

o f

Oh io" . (Laws

o f 1914 , Ac t

approved February

1 7 , 1 9 1 4 , s e c . 2 . )

The new 1919 Banking Code al so in co rp or at es word f o r word

t h e 1 9 1 4

p r o v i s i o n s r e l a t i n g

t o

re se rv e req uir eme nts . (General Code

o f Ohio, s e c . 710-5; Banking Law Pamphlet , 1 9 2 9 , s e c . 710-5, p . 7 . )

OKLAHOMA.

\

Banks a n d t rus t companies author ized t o become members o f Federal

Reserve Bank.

I n 1 9 2 1 , l e g i s l a t i o n was enacted i n t h i s S t a t e au t hor i z -

i n g State banks a n d trust companies t o j o i n t h e Federal Reserve

Sys tem. Thi s l e g i s l a t io n provides

i n

pa r t t ha t

a n y

State bank

o r

trust company "shall have power t o subscr ibe t o t h e capi t a l s tock

a n d

become

a

member

o f t h e

Fe de ra l Rese rve Bank". (Laws

o f 1921 ,

p . 1 4 3 ; Comp, Oklahoma S t a t u t e s . , 1 9 2 1 , s e c . 4 1 5 6 ; Banking Law

Pamphlet , 1 9 2 7 , s e c . 4 9 , p . 3 4 . )

Compliance with Federal Reserve A ct reserve requirements deemed com-

p l i ance wi t h S t a t e la w requirements .

The 1931 l e g i s l a t i o n a l s o p r ov i des t ha t a compliance by a

member bank o r t r u s t company "wi th t h e r eserve requi rements o f the

Federal Reserve A c t s h a l l b e he l d to be a ful l compliance with those

p r o v i s i o n s

o f t h e

laws

o f

th is S ta te which re qu ir e banks

o r

t r us t

companies t o c a r r y o r maintain reserve other than such a s i s r equi red

under t h e terms of t h e Federal Reserve A c t . (Laws o f 1921 , p . 143 ;

Comp. Oklahoma Statutes.,

1 9 2 1 , s e c . 4 1 5 8 ;

Banking

Law

Pamphlet ,

1927 ,

s e c . 5 1 , p . 3 4 . )

OREGON.


Bank.

I n 1 9 1 5 , t h e

laws

o f

t h i s St at e cov eri ng banks wore amended

so

a s t o author ize s t a t e banks t o purchase s tock i n a n d become members of a

* 34 —

t h e above quoted, pr ov is io ns o f the 1919 banking code.

Members may keep Federal Reserve A ct r e s e r ves i n l i e u o f those

r e q u i r e d b y S t a t e l a w .

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

3 5

* : 485

P. Hi Bank. That l e g is la t lo h provided that such banks sh al l have t h e

powietf i d purchase tind hold f&S* t h e purpose o f becoming a member of a

F . R ,

Bank

so

nluch

o f t h e

capi t a l s tock thereof

a s


i t f o r

membership i n such Federal Reserve Baik * * ( laws o f 191 5 , ch . 285 ,

s e c . 2 . ) I t w a s a l so provided tha t "Hereaf t e r no Sta te bank sha l l i n -

v e s t a n y o f i t s a s s e t s i n t h e cap i t a l s t ock o f any o t he r co r por a t i on e x -

cep t

i n t h e

cap i t a l s t ock

o f a

Federal Reserve Bank,

* * * . *

(Laws

o f

1 9 1 5 , c h . 2 8 5 , s e c . 8 . )

I n 1 9 1 7 , t h e

la ws co ve rin g t r u s t companies were "amended

so as

t o

g r an t

a n

a u t h o r i t y

t o

such companies

t o

become members

o f t h e F . R .

System similar t o t h e au t hor i t y con t a i ned i n t h e provis ions above quoted

co ve rin g ba nk s. (Laws o f 1 9 1 7 , c h . 1 9 7 , s ees . 1 0 a n d 2 2 . )

Sec t i ons 2 and 8 , chap t e r 2 8 5 , o f t h e laws o f 1 9 1 5 , cover ing

banks were amended in 1917 (Laws o f 1 9 1 7 , c h . 1 2 2 , s e c . 1 . ) a n d 1 9 1 9

(Laws o f 1 9 1 9 , c h . 2 5 0 , s e c . 1 . ) , r e s p e c t i v e l y ; b u t n e i t h e r o f these

amendments changed t h e wording o f t h e membership provisions.

I n 1 9 2 5 ,


w as

enac ted whi ch s p ec i f i c a l l y r epea l ed

t h e p r ov i s i ons above r e f e r r ed t o b u t which a t t h e same t ime inc or po ra t-

e d p r o v i s i o n s s u b s t a n t i a l l y t h e same a s t h e rep eal ed pr ov is io ns . (Laws

o f 1 9 2 5 , c h . 2507, sees. 39 , 81 , 98 (b ) an d 100 ; Banking Law Pamphlet ,

1 9 2 5 , s e c . 3 9 , p . 1 4 , s e c . 8 1 , p . 2 8 , s e c . 9 8 ( b ) , p . 3 5 , a n d s e c .

1 0 0 , p . 3 6 . ) Sect ion 100 o f the 1925 laws w as amended in 1927 (Laws

o f 1 9 2 7 , c h . 4 1 7 , s e c . 1 ) , a n d s e c t i o n 39 was amended i n 1 9 2 9 (Laws

o f 1 9 2 9 , c h . 3 8 0 , s e c . 8 . ) ; b u t

n e i t h e r

o f

th es e amendments a l t e r

t h e

e f f e c t

o f t h e 1 9 2 5

membership provisions.

Sta te r eserve requi rements n o t a p p l i c a b l e t o members o f Federal Reserve

System.

P r i o r t o 1 9 1 9 , t h e laws o f t h i s S t a t e d i d n o t con t a i n a n y p r o -

vis ions permit t ing member banks

a n d

t rus t companies

t o

c a r r y

t h e r e -

s e r ves p r es c r i bed

b y t h e

Federal Reserve

A c t i n

l i e u

o f t h e

r e s e r ves

r e q u i r e d b y t h e S t a t e l a w ; b u t member banks, b y l e g i s l a t i o n e na ct ed i n

1 9 1 5 (Laws o f 1 9 1 5 , c h . 2 8 5 , s e c . 9 ) a n d t rus t companies , b y l e g i s l a -

t ion enacted

in 1917

(Laws

o f 1 9 1 7 , c h . 1 9 7 , s e c . 2 5 . ) ,

were per mit ted

t o "mainta in a s r eserve depos i t s wi th t h e Federal reserve bank such p o r -

t i o n o f i t s ( t h e i r ) t o t a l r e s e r v e a s s h a l l b e r e q u i r e d b y members o f t h e


1

. I n 1 9 1 9 , however , l eg i s l a t i on w as enac t ed s t r i k -

i n g o u t t h e

p r ov i s i ons j u s t quot ed

a n d

p r ov i d i ng t ha t

t h e

p r o v i s i o n s

s e t -

t i n g o u t t h e amounts o f reserves which State banks a n d trust companies

were r equi red t o ma i n t a i n " s ha l l n o t apply t o . a Sta te bank ( o r t r u s t com-

pany) which i s a member o f t h e Federal Reserve Banking System a n d duly

complies with

a l l o f t h e

r e s e r v e

a n d

o ther r equi rements

o f

that System".

(Laws o f 1 9 1 9 , c h . 8 , s e c . 1 , a n d c h . 4 1 1 , s e c . 1 . ) T h e s e c t i o n s o f t h e

laws containing these provisions were amended i n 1 9 2 1 , b u t t h e wording

o f t h e

p r o v i s i o n s

w a s n o t

cha nge d. (Laws

o f 1 9 2 1 , c h . 1 8 7 , a n d 1 8 8 . )

7/17/2019 frsbog_mim_v34_0450.pdf


- 36 -

X-68?5

4 8 6

l a 1 9 2 5 ,


VW

passed which repeals

t h e 1 9 1 9

p ro v i s io n s ,

a s amended i n 1 9 2 1 , a n d p ro v id e s t h a t a compliance o n t h e p a r t of any

such (member) bank

o r

t r u s t company wit h

t h e

rese rve requ i rements

o f t h e

Federal Reserve A c t s h a l l b e h e ld to be a f u l l compliance wi th those

p r o v i s i o n s o f t h e laws o f t h i s s t a t e which re qu ir e banks o r t r u s t com-

p a n i e s

t o

mai nta in cash bala nces

i n


o r

with other banks,

and no such bank o r t r u s t company sh al l b e r e q u i r e d t o c a r r y o r mainta in

reserve other than such a s i s required under t h e terms o f t h e Federal R e-

se rve

A c t .

(Laws

o f 1 9 2 5 , c h . 2 0 7 , s e c .

98(d); Banking

Law

Pamphlet,

1 9 2 5 , s e c . 9 8 (d ) , p . 3 6 . ) . With re f e re nce t o savings banks o r departments,

t h i s l e g i s l a t i o n a l so p ro v id e s t h a t I f a n y savings bank, o r t h e savings

department of any bank o r t r u s t company, sh a l l hav e become a member o f

t h e

federa l rese rve sys tem,

i t

s ha l l comply wi th

t h e


o f t h e f e d e r a l r e s e r v e a c t a n d i t s amendments, a n d i t s compliance there-

wi th sha l l b e i n l i e u of and sha l l re l ie ve such bank o r savings depart-

ment o f a n y bank o r t r u s t company from compliance wi th t h e p r o v i s i o n s o f

t h i s a c t a s t o such re se rv es ". (Laws o f 1 9 2 5 , c h . 2 0 7 , s e c . 1 3 4 ; Banking

Law Pamphlet, 1 9 2 5 , s e c . 1 3 4 , p . 5 1 . )

The 1925 l e g i s l a t i o n a l so c o n tain e d a n a d d i t i o n a l p ro v i s io n

wh ic h r e a d su b s t a n t i a l l y t h e same a s t h e above quoted portion o f sec t ion

9 8 ( d )

(Laws

o f 1 9 2 5 , c h . 2 0 7 , s e c . 9 2 ;

Banking

Law

Pamphlet,

1 9 2 5 , s e c .

9 2 , p . 3 3 . ) ; a n d a l though t h e sect ion which conta ined th is addi t ional

p r o v i s i o n w as amended b y a n a c t approved March 9 , 1 9 2 9 , t h e wording o f

t h e 1 9 2 5

p r o v i s i o n

i s

unc han ged . (Laws

of 1929 , ch . 47 8 , s ec . 1 , Ac t

approved March 9 , 1929.)

PMffSYLVANlA.

Banks a n d t rust companies authorized t q become members o f Federal Reserve

Bank.

I n a n a c t o f J u l y 1 7 , 1 9 1 7 , a u t h o r i t y i s given t o a State bank

o r

trust company

t o

su b sc r ib e

t o t h e


a n d

become

a

member

o f a Federal Reserve Bank * * * . (A ct of - J u l y 1 7 , 1 9 1 7 , P . L . 1 0 2 1 ,

s e c . 1 ; Pur don 's Penna, St a t ut es , Annotated, Ti t l e 7 , c h . 1 2 , s e c . 3 7 1 ,

p . 1 1 4 ; Banking Laws, 1 9 3 0 , a r t . 1 1 , s e c . 4 6 4 , p . 2 5 3 . )

Members shal l mainta in reserves required b y Federal Reserve A c t .

I t i s a l so p rov ided i n t h e a c t o f J u l y 1 7 , 1 9 1 7 , t h a t a

member bank

o r

trust company

shall 'comply with

t h e

r e s e r v e

r e -

quirements o f t h e Federal Reserve A c t a n d i t s amendments, a n d t h e

compliance o f such bank o r t r u s t company the rew ith sh al l b e i n l i e u

o f , a n d

sha l l re l i ev e such bank

o r

t r u s t , company fro m, com pli ance

wi th t h e p r o v i s i o n s o f t h e laws of t h i s Commonwealth r e l a t i n g t o

t h e maintenance d f r e s e r v e s " . (Ac t o f J u l y 17 , 1917 , P . L . 1021 ,

s e c .

S i rPu rdon ' s Penna . S t a t u t es , Annota ted , T i t l e

7 , c h . 1 2 , s e c .

3 7 3 ; p . 1 1 4 ; Banking Laws, 1 9 3 0 , a r t . 1 1 , s e c . 4 6 6 , p . 2 5 3 . )

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

- - 4

RHODE ISLAFD.

Banks a n d t r u s t companies aut hor ize d t o "become members o f Federal Reserve

Bank.

On

Apr i l

1 9 , 1 9 1 7 , a n a c t o f t h e


o f

t h i s S t a t e

w as approved which pr ov id es th at A bank o r trust company may sub -

s c r i b e t o t h e c a p i t a l s t o c k a n d become a member o f a Federa l r eserve

bank wi thin t h e Federal res er ve d i s t r i c t where such bank o r t r u s t

company

i s

s i t u a t e d

* * * .

Such member bank

o r


b e s u b j e c t t o t h e p r o v i s i o n s o f s aid 'Fed era l Reserve A c t ' r e l a t i v e

t o member banks, a n d t o t h e r e g u l a t i o n s o f t h e

1

Federa l Reserve Bo ard ' .

Every such member bank

o r

trust company

may

have

a n d

e x e r c i s e

any

a n d a l l o f t h e powers a n d p r i v i l e ge s wh ich may be exe r c i s ed b y

member banks under t h e p r o v i s i o n s o f said 'Federal Reserve Act '" .

(Acts o f 191 7 , Ac t approved April 1 9 , 1 9 1 7 , c h . 1 5 1 4 , s e c . 1 ;

Banking

Law

Pamphlet ,

1 9 2 9 , s e c . 9 , p . 2 0 . )

No p r ov i s i ons s p ec i f i c a l l y au t hor i z i ng compli ance wi t h r e s e r ves p r es c r i be d

b y

Federal Reserve

A c t i n

l i e u

o f

those pre scr i bed

b y

S t a t e

l a w .

The

laws

o f

t h i s S t a t e

do no t

con t a i n

a n y

p r ov i s i ons

s p e c i f i c a l l y a u t h o r i z i n g b a n k s a n d trust companies which a r e members

o f t h e Federal Reserve System t o mainta in t h e r e s e r ves p r es c r i bed

b y t h e Federal Reserve A c t i n l i e u o f t hos e p r es c r i bed b y t h e Sta te

l a w .

SOUTH CAROLINA.

Banks a n d t rus t companies author ized t o become members o f "Nat ional

Reserve Associat ion o f t h e Uni ted States" .

On February 1 8 , 1 9 1 4 , t h e l e g i s l a t u r e o f th i s S ta te passed

a n a c t au t hor i z i ng S t a t e banks a n d trust companies t o become members

o f t h e Fe de ra l Rese rve System. Thi s a c t provides tha t a n y State bank

o r

trust company

m ay

a s s o c i a t e i t s e l f w i th

a n y

na t i o na l r e s e r ve

a s s o c i a t i o n of t h e Uni ted Sta tes , o r a n y branch there of under any

law now e x i s t i n g , o r h e r e a f t e r e n a c t e d b y t h e Congress of t h e United

S t a t e s ;

and may

inv es t such pa r t

of i t s

c a p i t a l

o r

surp lus there in

as may be

neces s a r y

t o

a c q u i r e

a n d

p r es e r ve

i t s

membership

i n

such

a s s o c i a t i o n . ( L a w s o f 1914 , Ac t o f February 1 8 , 1 9 1 4 , s e c . 1 ;

Code o f South Carol ina, 1 9 2 2 , s e c . 4002; Banking Law Pamphlet ,

1 9 2 8 , s e c . 7 5 , p . 3 6 . )

7/17/2019 frsbog_mim_v34_0450.pdf


Ho

pro vi s ion s expre ss ly a i i thor i z fng compl iance wi th r es erv es pre scr ibe d

b y Federal Reserve A c t i n l i e u o f r e s e r ves p r es c r i bed b y S t a t e l a w .

T he

laws

o f

t h i s S t a t e

d o n o t

con t a i n

a n y

p r ov i s i ons

express ly author iz ing Sta te banks a n d t r u s t companies which a r e

members

o f t h e


t o

c a r r y

t h e

r e s e r v e s

p r e -

s c r i b e d b y t h e Federal Reserve Act in l i e u o f those pre scr ib ed

b y t h e S t a t e l a w ; b u t t h e r e s e r ve r equ i r ed o f banks i s 3 p e r cent

o f t ime depos i t s a n d 7 p e r cen t of demand de p os it s, which may

c o n s i s t o f cash on hand o r i n banks. (Laws o f 1923 , c h . 1 12 , p .

1 5 9 . ) A compliance with t h e r eserve requi rements o f t h e Federal

Reserve

A c t ,

t h e r e f o r e ,

i s i n

e f f e c t

a

compliance with

t h e

Sta te

l a w .

SOUTH DAKOTA.

Banks

a n d

t ru s t companies doing banking bus ine ss auth or i zed

t o

become

members o f Federal Reserve Bank.

By l e g i s l a t i o n e n ac t ed i n 1 9 1 5 , a n y State bank was

a u t h o r i z e d

t o

"become

a

member

of a

federal reserve bank, ptu>»

suant t o t h e p r o v i s i o n s o f t h e f e d e r a l r e s e r v e a c t , a n d a n y a c t

o f

congress supplemental thereof ,

a n d

a f t e r becoming such member

a n d shareholder i t may comply with a n d s h a l l b e s u b j e c t t o said

f e d e r a l r e s e r v e a c t a n d such other bets o f congress , anyth ing

i n t h e laws o f t h i s s t a t e t o t h e cont rary notwi ths tanding" .

(Laws o f 1 9 1 5 , c h . 1 0 2 , a r t . 2 ) .

I n 1 9 1 9 , t h i s p r o v i s i o n w as amended s o t h a t i t n ow p r o -

vides tha t

a n y

State bank

m ay

become

a

member

o f a

f e d e r a l

r e -

serve bank, pursuant

t o t h e

p r o v i s i o n s

o f t h e


a c t , a n d a n y a c t o f congress supplemental thereto o r amendatory

t h e r e o f ,

a n d

a f t e r becoming such member

and

shareholder

i t may

comply wi th such fe de ra l re se rv e a c t a n d such other acts o f

congress , provide d tha t such s t a t e bank sha l l nev er th e le s s

b e

s u b j e c t t o a n d comply with a l l t h e laws o f t h i s s t a t e r e l a t i n g

t o

ba nk s" . (Laws

o f 1919 , ch . 125 , p . 110 ;

Comp. Laws, South

Dakota, 1 9 2 9 1 s e c . 8983; Banking Law Pamphlet , 1 9 2 7 , s e c . 8983,

p . 2 7 . )

The

laws

o f

t h i s S t a t e p r ov i de t ha t

no

trust company

m ay " i n v e s t a n y o f i t s f unds i n t h e s tock o f any o t he r t r u s t

company

o r

co rpo rat ion ". (Laws

o f 1 9 1 1 ,

ch.255,

s e c . 2 1 ;

Comp.

Laws, South Dakota, 1 9 2 9 , s e c . 9050; Banking Law Pamphlet , 1 9 2 7 ,

s e c .

9050,

p . 6 8 ) ; a n d i t

w i l l

b e

noted tha t

t h e

l a w s s p e c i f i -

ca l ly author ize only banks t o become members o f t h e Fede r a l R e -

serve System.

I n

view

o f t h e

fact , however , that

t h e

laws

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

-39 * : 48 9

permit t rust companies td t r a f t s ac t a banking "business (laws o f

1911» ch . 255 , sec . 2 ;

Camp. Laws, South Dakota,

1 9 2 9 , s e c .

9033; Banking Law Pamphlet , 1 9 2 7 , s e c . 9033, p . 6 2 ) , a n d. p r o -

vide tha t

F o r t h e

purpose

o f

th i s chapter every corp ora t ion ,

a s s o c i a t i o n , f i r m o r i nd i v i dua l i n th is S ta te whose bu s in es s ,

i n whole o r i n p a r t , c o n s i s t s i n t h e t ak i ng o f d e p o s i t s o r

buying

o r

se l l ing exchange sha l l

b e

he l d

to be a

bank?'.

(Laws o f 1 9 1 5 , c h . 1 0 2 , s e c . 1 ; Comp. Laws, South Dakota,

1 9 2 9 , s e c . 8948; Banking Law Pamphlet , 1 9 2 7 , s e c . 8948, p . 1 5 ) ,

i t

would seem th at t r u s t companies which re ce iv e de po si ts

o r

b u y o r sel l exchange a r e au t hor i zed t o become members o f t h e

Federal Beserve System.

Ho

pro vi s ion s aut hor iz in g compl iance wi th r eserv e pro vi s ion s

o f

Federal

Beserve Act in l i e u o f p r o v i s i o n s o f S t a t e l a w .

T he laws o f t h i s S t a t e d o n o t con t a i n a n y p r ov i s i ons

authorizing member banks

a n d

trust companies

t o

observe

t h e

r eserve requi rements o f t h e Federal Reserve A ct i n s t e a d o f t h e

r equi rements o f t h e S t a t e l a w .

TENNESSEE.

Banks and t rus t companies author ized t o become members o f Federal

Beserve Bank.

I n 1 9 1 9 , t h e

General Assembly

o f

Tennessee enacted

l e g i s l a t i o n which p r ov i des t ha t Any bank o r trust company,

incorpora ted under

th@

laws

o f

t h i s s t a t e

i s

au t hor i zed

and

shall have power t o subscr ibe , t ake a n d p a y f o r , a s a p a r t

o f i t s inves tments , shares o f t h e cap i t a l s tock o f a f e d e r a l

reserve bank

a n d t o

become

a

member

o f

such federa l r eserve

bank crea ted a n d organized under t h e A c t o f Congress o f t h e

United St at es , approved

t h e 2 3 d d a y o f

December,

A. D. 1913,

a n d known a s t h e Federal Beserve A c t , a n d i t s amendments".

(Baldwin's Cumulative Code Supplement, s e c . 3235a- l ; Publ ic

Acts , 1 9 1 9 , c h . 2 6 , ^ e c . 1 . ) Th is l e g i s l a t i o n a l s o p r o -

vides that a n y inves tment heretofore made b y a n y bank o r

t r u s t company in co rp or at ed under

t h e

laws

o f

t h i s s t a t e

i n

t h e cap i t a l s t ock o f any f edera l r eserve bank o f t h e cha r ac t e r

mentioned

i n

s ec t i on 3235a- l ,

i s

hereby author ized

and

va li d a te d " . (Ba ldw in' s Cumulative Code Supplement, s e c .

3235a-2; Public Acts , 1 9 1 9 , c h . 2 6 , s e c . 2 . )

7/17/2019 frsbog_mim_v34_0450.pdf


4* 4 0

X-6875

4.89^u

A d d i t i o n a l l e g i s l a t i o n

w as

enacted

in 1919

which

p rov ides

i n

pa r t t ha t

Any

bank

o r

trust company, incor-

porated under

t h e

laws

o f

t h i s S ta te , sha l l have

t h e

power

t o

subsc r ibe

t o t h e

cap i t a l s t ock

a n d

become

a

member

of a

Fed era l Reserve Bani*. (Pu bl ic Acts,

1 9 1 9 , c h . 6 9 , s e c . 2 ;

Baldwin

1

s Cumulative Code Supplement,

s e c .

3235a-4.)

Members

t o

keep Federal Reserve

A ct

r e se rves

i n

l i e u

o f

r e se rves

r e q u i r e d b y S t a t e l a w .

The 1919 l eg i s l a t i on a l so p rov ides t ha t a compliance

b y a member bank o r t r u s t company "wi th t h e r e s e r v e r e q u i r e -

ments

of t h e

Federal Reserve

A c t

s h a l l

b e

he ld

to be a

f u l l

compliance with those provis ions

o f t h e

laws

o f

t h i s S t a t e

which require banks

o r

trust companies

t o

maintain cash

b a l -

ances

i n


o r

with other banks,

and no

such bank

o r


b e

r equ i r ed

t o

c a r r y

o r

main ta in

r e -

serve other than such

a s i s

required under

t h e

terms

o f t h e

Federal Reserve A c t . (Pub l ic Acts , 1 9 1 9 , c h . 6 9 , s e c . 4 ;

Baldwin's Cumulative Code Supplement, s e c . 3235-6.)

TEXAS.

Banks

a n d

t rust companies authorized

t o

become members

o f

Federal

Reserve Bank.

A n a c t passed i ^ 1 9 1 4 , b y t h e Third Called S e s -

s ion

o f t h e

T h i r t y - t h i r d L e g i s l a t u r e

o f

th i s S ta te ,

p rov ides t ha t

a l l

St at e banks

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

- 4 i - •

48

a n d

trust companies

jh a l l have au t hor i t y

t o

become members

o f F e d -

eral Reserve Banks under

t h e

terms

a n d

l i m i t a t i o n s

a s m ay b e p r e -

sc r ib e d b y t h e laws o f t h e Uni ted S ta tes a n d such rules a n d r e g u l a -

t i o n s r e l a t i v e t h e r e t o a s may be "promulgated b y l a wfu l a u th o r i t y " .

(Acts 1 9 1 4 , Third Called Session, s e c . 1 ; Baldwin 's Texas Sta tutes ,

A r t . 5 1 9 ; Banking Law Pamphlet, 1 9 2 9 , a r t . 5 1 9 , p . 4 6 . )

No p rov is i ons au thor iz i ng compl iance v i th res e rve p ro v is ion s o f Federal

Reserve Ac t in l i e u o f p r o v i s i o n s o f S t a t e l a w .

T he laws o f t h i s S t a t e do no t appear t o con ta in a n y p r o -

vis ions authoriz ing b ,onks

a n d

t r u s t companies which

a r e

members

of

t h e Federal Reserve System t o main ta in rese rves i n accordance with

t h e p r o v i s i o n s o f t h e Federal Reserve A c t i n s t e a d o f t h e p ro v i s io n s

o f t h e S t a t e l a w .

UTAH.

Banks a n d t rust companies authorized to become members o f Federal Reserve

System.

I n 1 9 1 5 , t h e l e g i s l a t u r e o f t h i s S t a t e p a s sed l e g i s l a t i o n

which, wh il e

n o t

expr ess l y mentioning

a

Federal res erv e bank, aut hor -

ized a Sta te bank o r trust company

t o

purchase , own nnd hold shares

o f t h e c a p i t a l s t o ck of any other bank, trust company o r o t h e r c o r -

po ra ti on . (Ses sio n Laws

o f 1 9 1 5 , c h . 4 7 , s e c . 1 . )

I n 1 9 1 9 , t h e leg is la tu re oassed ano ther a c t cover ing mem-

b e r s h i p o f banks an d trust companies i n t h e Federal Deserve System.

This

a c t

express l y au thor i ze^

a

bank

o r

trust company

t o

become

a

member o f t h e Federal Reserve System, b y p ro v id in g th a t a n y bank

o r t r u s t company inc orp ora te d under t h e laws of th i s S ta te sha l l

have

t h e

power

t o

subscr ibe

t o t h e


a n d

become

a

member

o f a Federal Reserve System created a n d organized under an Act of

Congress o f t h e Uni ted S ta tes a n d known a s t h e Federal Reserve A c t .

(Laws o f 1 9 1 9 , c h . 1 9 , s e c . 1 ; Banking Law Pamphlet, 1 9 2 7 , s e c . 1 ,

p . 2 1 . )

Compliance with reserve requirements of Federal Reserve A ct r e l i e v e s

compliance with State

l a w .

T h e 1 9 1 9 a c t a l so p rov ides tha t Any such bank o r t ru s t

company shall comply with

t h e


o f t h e

Federal

Reserve A c t an d i t s amendments, a n d t h e compliance o f such bank o r

trust company therewith shall b e i n l i e u o f , a n d sha l l re l ieve such

bank o r t r u s t company from compl iance wit h t h e p r o v i s i o n s o f t h e laws of

t h i s S t a t e r e l a t i n g

t o t h e

maintenance

o f

res er ves " . (Laws

of 19 19 , c h .

1 9 , s e c . 3 ; Banking Law Pamphlet, 1 9 2 7 , s e c . 3 , p . 2 1 . )

7/17/2019 frsbog_mim_v34_0450.pdf


4 8

- 42 ^

VERMONT.

Banks

and.

t r u s t companies aut hor i zed

t o

become members

o f

Federal Reserve

Bank.

I n a n a c t approved February 2 1 , 1 9 1 9 , t h e General Assembly

o f

t h i s S t a t e p r ov i des t ha t

a

bank

o r

t m s t connany inc orp ora ted

under

t h e

laws

o f

this State shal l have

t h e

power

t o

s ubs c r i be

t o t h e

cap i t a l s t ock

a n d

become

a

member

o f a

Fe de ra l re s e rv e bank?'. (Laws

of 1919 , Ac t Mo. 143 ,

approved February

2 1 , 1 9 1 9 , s e c . 2 . )

Federal Reserve

A c t

Reserves

may b e

mainta ined

i n

l i e u

o f

r eserves

r e q u i r e d

b y

S t a t e

l a w .

In 1919

l eg i s l a t i o n a ls o p r ov i des t ha t

a

compliance

by a

member bank

o r

t r u s t company "wi th

t h e


o f ' t h e

Federal Reserve

A c t

s h a l l

b e

he l d

t o be- a

ful l compliance with those

p r o v i s i o n s

o f t h e

laws

o f

t h i s Sta te which re qu ir e banks

o r

t r u s t

companies

t o


i n


o r

wi th other

banks ,

a n d n o

such bank

o r


b e

r equ i r ed

t o

car ry

o r maintain reserve other than such a s i s required under t h e terms

o f t h e Federal Reserve A c t . (Laws of 1 919 , Ac t No . 143 , approved

February

2 1 , 1 9 1 9 , s e c . 4 . )

VIRGINIA.

Banks

a n d


t o

become members

o f

Federal Reserve

System.

On

March

2 , 1 9 1 4 , a n a c t o f t h e


o f

t h i s S t a t e

w as

approved

i n

which ba&ks were "empowered

t o

become member banks

o f t h e

f edera l r eserve banks

o f t h e

Uni ted Sta tes ,

* *

(Acts

of 1914 , Ac t

approved March

2 , 1 9 1 4 ; C h . 2 7 , s e c . 1 , p . 4 2 . )

Apparent ly t h e 1 9 1 4 provi s ion cont inued i n e f f e c t u n t i l

March

2 7 , 1 9 2 8 ,

when another

a c t w a s

approved

t o

r e v i s e , c o l l a t e

a n d

codi fy in to

o n e a c t t h e

gene ra l s t a t u t e s

of the

Commonwealth

r e l a t i n g

t o

banks

a n d

banking, which

a c t

s h a l l c o n s t i t u t e

a n d b e

des ignated

a n d

c i t e d

a s t h e

Virginia banking

a c t , a n d t o

r epea l

a l l

Code se ct io ns

a n d a l l

a c t s

a n d

p a r t s

o f

ac t s i ncons i s t en t

t he r ewi t h ,

a n d t o

p r ov i de pena l t i e s

f o r t h e

v i o l a t i ons t he r eo f " .

T h e 1 9 2 8 a c t ,

however, does

n o t

a f f e c t

t h e

r i g h t

o f

banks

t o

become

members o f t h e Federal Reserve System, b u t merely contains a more

e l abor a t e p r ov i s i on o n t h e s u b j e c t , t h e p r ov i s i on i n this connect ion

s t a t i n g t h a t A ny bank he r e t o f o r e o r he re af t e r incorpo ra ted under

7/17/2019 frsbog_mim_v34_0450.pdf


m

4S

X^6875

489

t h e laws o f th i s S ta t e , may if i t so elect, become a member bank

o f t h e Federal Reserve lank System o f t h e United Sta te s, sub jec t

t o t h e p r o v i s i o n s o f t h e a c t o f Cotigress o f t h e Uni ted S ta tes , a p -

proved December twenty-third, nineteen hundred an d t h i r t e e n , and

of any amendments thereof permitting i t t o do so , and s h a l l b e v e s t -

ed with a l l powers conferred upon State member banks of t h e said

System b y terms o f t h e s a i d a c t o r acts , which shal l b e exerc ised

sub jec t t o a l l r e s t r i c t i o n s a n d l imitat ions imposed b y t h e said

Federal Reserve

A c t o r

Acts,

o r b y

r e g u l a t i o n s

o f t h e

Federal

r e -

ser ve board made pur sua nt th er et o * * * . (Acts of 1928 , Ac t

approved March

27 , 19 28 , Ch . 507 ,

T i t l e

1 , s e c . 7 , p . 1 3 1 0 ;

Michie ' s V a. Code of 193 0, c h. 164A, T i t l e 1 , s e c . 4149(7), p .

1046.)

I t w i l l b e noted that t h e laws only specifically permit

banks t o become members o f t h e Federal Reserve System; b u t i n view

o f t h e fact that t h e word bankf, a s defined in the laws, incl udes

tr us t companies, they al so

a r e

apparently authorized

to

become

members under t h e above quoted pr ov is io ns . (Mi chi e's Va. Code

of 1930, ch . 164A,

T i t l e

1 ,

sees .

4149 (1 ) and 4149 (2 ) , p.

1044.)

Compliance with reserve requirements of Federal Reserve A c t authorized.

The laws o f Virginia provide t h a t ' hen an y bank h a s become

a member o f t h e Federal reserve bank system, i t s h a l l b e r equ i red to

comply with t h e reserve requirements o f t h e Federal reserve a c t . ( A c t

o f 1 9 2 8 , s e c . 3 4 . )

WASHINGTON.

Banks a n d tr u s t companies aut hor ize d t o become members o f Federal Reserve

Bank. — — — —

In 1915 the l e g i s l a t u r e o f t hi s State passed an act in

which i t wa s provided that No bank shall subscribe f o r o r purchase

t h e

stock

of any

other banking corpo ration , except

a

Federal

r e -

serve bank o f ihich such bank shall become a member, and then only

t o t h e

extent required

by

such Federal re se rv e bank*. (Laws

o f

1 9 1 5 , c h . 3 5 , s e c . 5 , p . 1 2 8 . )

In 1 9 1 7 , addit ional le gi s l at io n having reference to member-

ship

i n t h e

Federal>

Re

serve System

w as

enacted. This le gi s l at io n

p r o -

vided That an y bank o r trust company may part i c ipate i n membership i n

t h e federal reserve banking system of the United States * * * .

(Laws

of 1917 , ch . 8 0 . )

7/17/2019 frsbog_mim_v34_0450.pdf


489

X-6875>

- 4 4 -

The 1915 provis ion above referred, to was also amended i n

1917 so a s to

p rov ide tha t

a

bank

o r

trust company shall

n o t s u b -

s c r i b e f o r o r purchase t h e s to c k o f a n y other banking house o r t r u s t

company, except

a


o f

which such corporation

shall become a member, a n d then only t o t h e e x t e n t r e q u i r e d b y such

fe de ra l res e rv e b a n # . (Laws o f 1 9 1 7 , c h . 8 0 . )

T he s e c t io n o f t h e laws conta ining t h e 1 9 1 7 p ro v i s io n

f i r s t ab ove r e f e r r e d

to was

again amended

i n 1 9 1 9 , b u t t h e

wording

of the 1917 p r o v i s i o n i s n o t changed. (Laws o f 1 9 1 9 , s e c . 7 , p .

7 3 0 ; Banking Law Panrohlet, 1 9 2 9 , s e c . 2 5 , p . 1 2 . ) I n 1 9 2 9 , t h e

1917 p ro v i s i o n l a s t a bo ve r e f e r r e d to was also amended, a n d a l though

th i s l e g i s l a t i o n in se r t e d so me f e w add i t iona l words, t h e r i g h t o f

banks a n d trust companies t o purchase s tock i n a Federa l rese rve

bank i s n o t a f fe c t ed . (Laws o f 1 9 2 9 , s e c . 5 , p . 1 0 1 ; Banking Law

Pamphlet, 1 9 2 9 , s e c . 4 6 , p . 2 5 ) . T h e 1 9 2 9 p r o v i s i on s p e c i f i c a l l y

p ro v id e s t h a t a bank o r t r u s t company sh al l n o t " su b sc r ib e f o r o r

purchase t h e s t o c k o f a n y other banking house o r trust company, o r

o f a n y domestic o r fo re ig n c o rp o ra t io n o f a n y char ac t e r , excep t a


o f

which such corporation shall become

a

member, a n d then only t o t h e e x t e n t r e q u i r e d b y such federal reserve

bank".

S ta te rese rve requ i rements n o t a p p l i c a b l e t o members.

By l e g i s l a t i o n e n a ct ed i n 1 9 1 7 , t h e l e g i s l a t u r e o f t h i s

S ta te p rov ide s tha t |she S ta te rese r ve requ i rements " s ha l l n o t a p -

p l y t o a

corporat ion which

i s a

member

o f t h e


baa

ki ng

system a n d duly complies with a l l of t h e r e s e r v e a n d q th e r r e q u i r e -

ments o f t ha t syste m". (Laws o f 1 9 1 7 , c h . 8 0 , s e c . 4 6 ; Banking

Law Pamphlet, 1 9 2 9 , s e c . 6 1 , p . 2 9 . )

WEST VIRGINIA.

Banks

a n d

t r u s t companies aut hori zed

t o

become members

o f

Federal Reserve

Bank.

I n 1 9 1 9 t h e l e g i s l a t u r e o f t h i s S t a t e p a s se d l e g i s l a t i o n

p ro v id in g th a t a n y bank o r trust company incorporated under t h e

laws o f t h i s s t a t e sh a l l h av e t h e power t o subscr ibe t o t h e c a p i t a l

s to c k

a n d

become

&

member

o f &

fe de ra l re se rv e bank?. (Acts

o f

1 9 1 9 , c h . 6 0 . )

I n 1 9 2 9 , l e g i s l a t i o n w as enacted which repeals the 1919

p r o v i s i o n s ; b u t included i n t h e 1 9 2 9 l e g i s l a t i o n a r e membership p r o -

v i s i o n s

o f

e x a c t l y

t h e

same effect

a s t h e

r e p e a l e d p ro v i s io n s .

The

7/17/2019 frsbog_mim_v34_0450.pdf


X-6875

4 8 9 /

- 45 - (

1 9 2 9 a c t

Spe c i f ica l ly prov ides

i n

part that

Any

banking in st i t u-

tion incorporated under t h e laws o f this State shall have t h e power

t o

subscribe

t o t h e

capita l s tock

and

become

a

mepi^er.of

a

federal- -

reserve banld'»

(Acts o f

1 9 2 9 , 6 h

%

2 3 . sec# < 0 ;

Code

o f 1 9 3 1 , c h . 3 1 ,

A c t 8 , s a c . 1 7 . )

I t w i l l b e no ted tha t t h e 1 9 29 a c t expre ss ly au t hor ize s on ly

" b a n k i n g i n s t i t u t i o n s " t o become members o f t h e Federal Reserve System;

but

t h i s

a c t , i n

d e f i n i n g

t h e

t er m "bank i ng i n s t i t u t i o n" , p r ov i des t ha t

i t

shall,

i nc l ude a t r u s t company. (Acts o f 1 9 2 9 , ch .23 , s e c . 1 ; Code o f 1 9 3 1 , ch . 3 1 ,

A c t 4 , s e c . 1 . ) I t ' would seem, t he re fo re , th at a trust company may become

a member o f t h e Federal Reserve System under t h e above quoted provis ion o f

t h e 1 9 2 9 a c t .

Reserves maintained i n accordance with provisions o f Federal Reserve Act

held compliance with provisions

o f

Sta te

law.

The 1919 l e g i s l a t u r e p a s s e d l e g i s l a t i o n p r o v i d i n g t h a t

a compliance b y member banks a n d t r u s t companies "wi th t h e r eserve

requi rements o f t h e Federal Reserve A c t s h a l l b e h e l d to b e a f u l l

compliance wi th those provis ions

o f t h e

laws

o f

this State which

requi re banks o r trust companies t o maintain cash balances i n t he i r

v a u l t s

o r

with other banks,

an d n o

such bank

o r


b e r e q u i r e d t o c a r r y o r maintain reserve other than such a s i s r e -

quired under

t h e

terms

o f t h e


a c t . (

Acts

o f 1 9 1 9 ,

ch. 60 )

On February 2 8 , 1 9 2 9 , t h e l e g i s l a t u r e o f t h i s s t a t e pas s ed

a n a c t

which re pe al s

t h e 1 9 1 9

re ser ve pro vi s io n above quoted. This

a c t , however, includes a provision excepting member banks a n d t r u s t

companies from complying with

t h e

r e s e r ve p r ov i s i ons

o f t h e

S ta te

l a w which i s s u b s t a n t i a l l y t h e same a s t h e provis ion which i t r e -

pea l ed , t h e p r o v i s i o n i n t h i s connec t ion provi d ing " t ha t a compliance

o n t h e p a r t o f a n y such banking in s t i t u t io n which i s a member o f t h e

f e de ra l r es erv e system wi th t h e r eserve requi rements o f t h e f ede r a l

r e s e r v e a c t , s h a l l b e h e l d to b e ful l compliance wi th t h e p r ov i s i ons

he r eo f , w hi ch r eq u i r e bank i ng i n s t i t u t i on s t o maintain cash balances

i n t h e i r v a u l t s o r with other banks and no such member bank shall

b e

r e q u i r e d

t o

c a r r y

o r


a s i s r e -

quired under

t h e terms

o f

t h e

f e d e r a l

reserve, a c t .

(Acta o f

1929 ,

c h . 2 3 , s e c . 1 9 ; 06da of 19 31 , c h . 31 , Ac. t. 8 , s e c . 16.<

The 1929 act

also contains

an

additional reserve provision

which pro vid es t hat A compliance on the part of any such banking

ins t i t u t io n w i t h t h e reserve requirements o f t h e federal reserve

act . s ha l l b e he ld to be a f u l l compliance with those pr ov is io ns

of the laws o f t h i s sta te which require sta te banking in st it ut io ns

t o carry o r maintain reserve other than such a s i s required under

t h e terms o f t h e federal reserve a c t . {Acts of 1929 , ch . 23 , s ec .

2 0 ;

Code

o f 1 9 3 1 , c h . 3 3., A c t . 8 , s e c . 1 6 . )

7/17/2019 frsbog_mim_v34_0450.pdf


46

4 8 9 4 ,

X-6875

0

WISCONSIN.


Bank.

I n 1 9 1 5 , t h e

laws

o f

th i s S ta te cover ing

t h e

powers

o f

banks were amended

so as to

au t hor i ze

a

bank

To

purchase

a n d

hold,

f o r t h e purpose o f becoming a member of f edera l r eserve bank, s o

much

o f t h e

ca pi t a l s tocx thereof

a s


i t f o r

member-

ship

i n

such reserve bank

* * * ; to

become

a

member

o f

such federal

reserve bank, a n d t o have a n d exe r c i s e a l l powers, n o t i n c o n f l i c t

wi th

t h e

laws

o f


a r e

co nf err ed upon

a n y

such

member bank

b y t h e

' f e d e r a l r e s e r v e

a c t

1

.

(Laws

of 19 15 , ch .

7 6 , p . 6 7 . )

I n 1 9 2 1 , t h e above provis ion w as r epea l ed b u t t h e n ew

l e g i s l a t i o n i n c o r p o r a t e s a p r ov i s i on r ead i ng s ub s t a n t i a l l y t h e same

a s t h e

former provis ion.

The new a c t

s p e c i f i c a l l y p r o v i de s

i n

par t

t h a t

A ny

bank

may

purchase

a n d

hold ,

f o r t h e

purpose

o f

becoming

a

member

o f t h e

f edera l r eserve bank,

so

much

o f t h e

capi t a l s tock

thereof a s w i l l q u a l i f y i t f o r membership i n such reserve bank * *

* ; may

become

a

member

o f

such federal reserve bank,

and may

have

a n d

exe r c i s e

a l l

powers,

n o t i n

conf l i c t w i t h

t h e

laws

o f

t h i s s t a t e ,

which

a r e

con fer red upon

a n y

such member bank

b y t h e

' F e d e r a l

R e -

serve A c t ' . Such member ba nk a n d i t s d i r e c t o r s , o f f i c e r s , a n d

s tockholder s sha l l cont inue t o b e subject , however, to a l l l i a b i l i t i e s

a n d

d u t i e s imposed upon them

by any l aw o f

th is s t at e" . (Laws

o f

1 9 2 1 , c h . 5 5 5 , p , 9 2 3 :

Wise. Statutes ,

1 9 2 9 , s e c .

221.04

( 3 ) , p .

1 7 9 0 ;

Banking

Law

Pamphlet ,

1 9 2 5 , s e c .

221.04

( 3 ) , p . 2 8 . )

I t w i l l b e noted that a l l o f t h e above pro vis io ns ex press-

l y

permit only "banks"

t o

become members

o f t h e

Federal Reserve

S y s -

t em ; b u t , a s t h e

laws also provide

f o r t h e

o r gan i za t i on

o f

" t r u s t

company banks" under

t h e

same pr ov is io ns under which banks

may b e

organized , a n d , except ig. two i r r e l eva nt ins tanc es , subj ec t such

companies

t o a l l t h e

pro vi s i ons , r equi rements

a n d

l i a b i l i t i e s c ov er -

i n g

banks ,

i t

would seem t h a t such Mtrus t company banks"

may

also

become members

o f t h e

Fed era l Reserv e System. Furt herm ore,

t h e

f o l l owi ng p r ov i s i ons s p ec i f i c a l l y dea l ing wi t h t h e r e s e r ve r equ i r e -

ments

o f

member banks

a n d

t r u st companies reco gnize tha t t r u s t

companies

may

j o i n

t h e


Member banks

a n d

trust companies only required

t o

car ry r eserves prescr ibed

b y

Federal Reserve

A c t .

T he


o f

t h i s S t a t e

d i d n o t

permit member banks

7/17/2019 frsbog_mim_v34_0450.pdf


* 4i -

X-6875

a n d

trust companies

t o

ca rr y tiie res er ve s presc ribed ,

by t h e

Federal

Reserve

A ct

u n t i l

t h e

year

1 9 2 5 ,

when

i t

passed

a n a c t

which

p r o -

vides tha t a n y bank o r t r u s t company, inco rpo rat ed under t h e laws

o f th i s s t a t e which i s o r h e r e a f t e r may become a member o f t h e f e d -

eral reserve bank sys tem o f t h e Uni ted Sta tes o f America shall b e

r e q u i r e d

t o

car ry dur ing

t h e

pe r i od

o f

such membership only such

cash reserve funds as may be required from time t o t ime t o b e main-

t a i n e d b y national bank members o f sa id f edera l r eserve bank s y s -

t e m . (Laws o f 1 9 2 5 , c h . 2 9 2 , s e c . 2 ; Wiscons in Sta tu tes , 1 9 2 9 ,

s e c .

221.27; Banking

Law

pamphlet ,

1 8 2 5 , s e c .

221.27,

p . 3 8 . )

WYOMING

Banks a n d t rus t companies author ized t o become members o f Federal

Reserve Bank.

An a c t o f

th is S ta te approved February

1 9 , 1 9 1 9 ,

provides

that banks a n d trust companies may " s ubs c r i be t o t h e ca pi t a l s tock

a n d become a member o f a Federal Reserve Bank?

1

. (Laws o f 19 19 , ch .

4 5 , s e c . 2 ; Wyoming Comp. S t a t s . , 1 9 2 0 , s e c . 5206.)

Members only required t o mainta in r eserves prescr ibed b y Federal

Reserve A c t .

Leg i s l a t i on enac t ed in 1925 provid es tha t a n y s tate bank that

i s a

member

o f t h e

Federal Beserve System shall

b e

r e q u i r e d

t o

keep

only such reserve a s i s r e q u i r e d b y t h e Federal Reserve A c t f o r n a t i o n -

a l ba nk s. (Laws o f 1 9 2 5 , c h . 1 5 7 , s e c . 3 9 . )

I n 1 9 2 7 , t h e 1 9 2 5


w as

amended

b u t t h e p r o -

vis ion permit t ing members t o mainta in only r eserves r equi red b y t h e

Federal Reserve

A ct

forms

a

p a r t

o f t h e

amending l e g i s l a t i o n . (Laws

o f 1 9 2 7 , c h . 1 0 0 , s e c . 1 . )

frsbog_mim_v34_0450.pdf

Documents

t e r e

laws of t h i s s t

t r u s t companies

maintenance of r e s

t r u s t coi

t r u s t company s

r e s e r v e system

t s amendments