COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C., Wednesday, February 3, 1897.

The Committee met at 10.30 a. m.

Members present: The chairman (Mr. Walker) and Messrs. Brosius, Van Voorhis, Fowler, Lefever, Spalding, Calderhead, Hill, Cooke, Cox, Stallings, Black, Newlands, and Hendrick.

STATEMENT OF HON. MARRIOTT BROSIUS.

Mr. Brosius, from the subcommittee to whom was referred the bill (H. R. 875) to incorporate an international American bank, reported back the bill with favorable recommendation, and moved that, as amended, the bill be reported to the House.

[H. R. 875. Fifty-fourth Congress, second session.]

IN THE HOUSE OF REPRESENTATIVES.

December 9, 1895.

Mr. HITT introduced the following bill; which was read twice, referred to the Committee on Banking and Currency, and ordered to be printed.

[Referred to a subcommittee, Mr. BROSIUS, chairman, and reported back with the recommendation that the bill as amended be reported to the House.]

[Omit the part in brackets and insert the part printed in italics.]

A BILL to carry into effect the recommendations of the International American Conference by the incorporation of the International American Bank.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That Cornelius N. Bliss, of New York; T. Jefferson Coolidge,

of Massachusetts; Andrew Carnegie, of Pennsylvania; John F. Hanson, of Georgia; Charles R. Flint, of New York; Enoch Pratt, of Maryland; H. G. Davis, of West Virginia; P. D. Armour, of Illinois; Morris M. Estee, of California; James S. Clarkson, of Iowa, and Charles H. Turner, of Missouri, be, and they are hereby [are], designated commissioners to receive subscriptions to the capital stock of a corporation to be known as the International American Bank, and to exercise such other powers and perform such other duties as are by the terms of this act imposed upon them.

SEC. 2. That the persons herein before named as commissioners, a majority of whom shall constitute a quorum for the transaction of business, shall meet at the city of Washington, in the District of Columbia, within sixty days after the passage of this act, and shall then organize as a board by the election of a chairman, secretary, and treasurer, and shall require the treasurer to give bond for the faithful performance of his duties and for the accounting of all moneys received by him, and shall establish such rules prescribing the duties of such officers and other agents as may be required. The said commissioners shall thereafter open or cause to be opened books of subscription to the capital stock of said corporation in accordance with the terms of this act, and shall place such books, for the purpose of receiving such subscriptions, in the city of Washington, in the city of New York, and in any other cities within the United States which they may designate; and for the purpose of opening such books and receiving subscriptions for such stock, in accordance with the terms [thereof] hereof, the said commissioners are authorized to appoint any such subordinate agents in such cities as may be required; such subscription books shall be so arranged that each subscriber shall write thereon his name, place of residence, the number of shares of the par value of one hundred dollars each for which he subscribes, and the total par value of such shares, [and the persons receiving such subscriptions shall, in a separate column, write the amount of cash received from each] and he shall deposit in lawful money ten per centum of the par value of the shares so subscribed for with the persons receiving such subscriptions, who shall, in a separate column, write the amount of cash so received from each subscriber by reason of such subscription, at the time of the making thereof, in accordance with the terms and provisions of this act. As soon as fifty thousand shares of the capital stock of the said company shall have been subscribed for, the said commissioners shall notify the subscribers therefor to pay in, within thirty days after the giving of such notice, fifteen per centum of the amount of their subscriptions, respectively, in addition to the ten per centum paid when such subscriptions were made. Such notice shall be given by mailing to each subscriber, at the place of residence designated by him at the time of making such subscription, a notice specifying the amount of such fifteen per centum and the number of shares subscribed for by each [of them] subscriber, respectively, and requiring the payment to be made to the treasurer of the said commissioners at a place to be designated in said notice. When and as soon as fifty thousand shares of the capital stock of said company shall have been actually subscribed for and twenty-five per centum thereof paid in by such subscribers ratably, as required by the terms of this act, the chairman and secretary of the board of commissioners hereby created shall appoint a time and place for the first meeting of the subcribers to the capital stock of said corporation, and shall give notice thereof by publication in at least two daily newspapers in [the city of Washington] each of the cities of Washington and New York for at least sixty days, and at least forty days previous to the day of such meeting shall also send notices by mail to each of the subscribers to said stock at the place of residence designated by him upon the subscription book signed by him. The president of the said board of commissioners shall attend at such meeting, call the same to order, and produce to said meeting the original subscription books for said stock; and if it shall appear from the said subscription books that the subscriptions to the capital stock of said company exceed fifty thousand shares, it shall be the duty of said board of commissioners to distribute the full number of shares authorized, to and among the subscribers therefor in proportion to their respective subscriptions, and thereupon the persons appearing under such distribution to be subscribers for said stock shall participate in and be entitled to vote at said meeting, each one of such subscribers being entitled to cast one vote on each share of stock allotted to him. The said meeting shall select its own chairman, secretary, and tellers. Subscribers for a majority of the whole number of shares subscribed shall be present in order to constitute a quorum for the transaction of the business of the said meeting. If less than a quorum appear at the time and place specified in said notice, such meeting may adjourn from day to day until a quorum attends. After the organization of such meeting, which may be continued by adjournments, those present shall proceed to the election of directors of said bank to serve for the first year, and to the passage of by-laws for the government thereof, and shall transact no further business.

SEC. 3. That it shall be the duty of the officers elected at such meeting to deliver to the president and secretary of the commissioners hereby appointed duplicate

copies of the proceedings of such meeting; said president and secretary shall retain one of such copies and shall transmit the other of such copies to the Comptroller of the Currency of the United States, whose duty it shall be to forthwith examine the same and, in the event that the same shall be found to be correct in form and to contain no provisions in conflict with the provisions of this act or [the] other laws of the United States, to 80 certify to the said board of commissioners [that fact]; and upon the receiving of such certificate from the Comptroller of the Currency it shall be the duty of the said commissioners to deliver over to the board of directors elected at such meeting the books containing the subscriptions for said stock, all cash which may have been received by said commissioners upon the subscriptions for said stock, together with a detailed statement of their expenses in the performance of the duties hereby imposed, and a complete transcript of all records of all their proceedings under this act, and of all other records and papers pertaining thereto; and upon the surrender of such books and papers and payment of such money the said directors shall pay to the treasurer of said commissioners the amount of such expenses as shown by such statement directed to be furnished to them by the said commissioners. In the event of any dispute as to any or all the items of such expenditures the same shall be submitted to the Comptroller of the Currency, and the amount certified by him to the said directors shall forthwith be paid out of the funds collected and paid over by the said commissioners, or out of any other funds which may come to the hands of the said directors as the property of said corporation. Upon delivery of said papers, books, and records, and payment of said money, the duties of said commissioners and their powers under this act shall cease and determine. They shall receive for the performance thereof no compensation.

SEC. 4. That the capital stock of the corporation hereby authorized shall be fixed at five million dollars, divided into shares of the par value of one hundred dollars each. Such shares shall be deemed personal property, and shall be transferred upon the books of the corporation in such manner as may be prescribed by the by-laws. The capital of said bank may, at any time after the completion of its organization as above provided, be increased, with the approval of the Comptroller of the Currency, to any sum not exceeding the sum of twenty-five million dollars, to be divided into shares of the par value above provided for the original capital. Such increase shall be authorized by a resolution passed at any regular meeting of the board of directors by the votes of two-thirds of the members of that body, and thereafter submitted to the next regular meeting of the stockholders, or to a special meeting called for that purpose, and by such [meetings] meeting adopted and approved by a vote of [two thirds of the stockholders present at such meetings constituting a quorum and stockholders representing two-thirds of the capital stock. But no such increase of capital stock shall be valid until the whole amount of such increase is paid in and the Comptroller of the Currency duly notified thereof and his certificate obtained, specifying the amount of the increase of capital stock, with his approval thereof, and that it has been duly paid in as a part of the capital stock of this bank. The capital stock of said bank may at any time after the completion of its organization be reduced, with the approval of the Comptroller of the Currency, to any sum not below five million dollars. Such reduction shall be authorized by a resolution passed at any regular meeting of the board of directors by the votes of two-thirds of the members of that body, and thereafter submitted to the next regular meeting of the stockholders, or to a special meeting called for that purpose, and by such meeting adopted and approved by a vote of stockholders representing two-thirds of the capital stock; but no such reduction of capital stock shall be valid until the Comptroller of the Currency has been duly notified thereof and his certificate obtained specifying the amount of the reduction and his approval thereof, with the amount of capital stock after said reduction. But no change shall be made in the capital stock of this bank by which the rights, remedies, or security of the existing creditors of the association shall be impaired.

SEC. 5. That subscriptions to the capital stock of said company, as above provided, or to any additional stock that may be [thereafter] hereafter authorized, shall not be received by the said commissioners or accepted by the officers of said corporation after the same shall be organized, unless accompanied at the time of each subscription with a payment in cash of ten per centum of the amount thereof; and the said commissioners in determining whether fifty thousand shares of the said stock have been actually subscribed for the purpose of calling the subscribers' meeting, as above provided, shall not consider or count as part of said fifty thousand shares required to be subscribed any subscription which was not accompanied by the payment in cash of ten per centum of its face value at the time it was made.

SEC. 6. That in case the subscriptions to any additional stock [may be] authorized after the organization of said corporation shall at any time exceed the amount of additional stock at that time authorized to be issued, the board of directors of the said corporation shall distribute the full number of shares authorized at the time of such distribution, and not issued, to and among the subscribers therefor, in proportion to their respective subscriptions.

SEC. 7. That as soon as fifty thousand shares of the capital stock shall have been subscribed for in the manner herein before provided and the certificate of the Comptroller of the Currency referred to in section three of this act has been executed the persons so subscribing, and all persons who shall or may be associated with them or their successors, shall forthwith become a body corporate by and under the name of "The International American Bank," and by that name shall have corporate existence for the term of twenty years, and shall have power

First. To adopt and use a corporate seal and to issue certificates of stock as herein provided.

Second. To have succession for twenty years from the period of its organization, unless it is sooner dissolved by the act of its [shareholders] stockholders or by operation of law, or unless its franchise becomes forfeited by some violation of law. Third. To make contracts.

Fourth. To sue and be sued, complain and defend, in any court of law or equity as fully as natural persons.

Fifth. To elect or appoint directors; by its board of directors to appoint a president, a vice-president, a cashier, assistant cashier, and other officers; to dismiss such officers or any of them at pleasure, and appoint others to fill their places, and to employ all necessary assistants and employees, either in the United States of America or elsewhere, for the purpose of carrying out the powers hereby granted and transacting the business of said corporation; to fix the compensation of all such assistants and employees and change the same from time to time as may be deemed necessary, and to dismiss them or any of them at pleasure, and to appoint others to fill their places.

Sixth. To adopt by-laws, not inconsistent with law, regulating the manner in which its stock shall be transferred, its directors elected or appointed, its officers appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed, fixing the salaries, duties, and powers of its said officers, and prescribing the penalty of bonds to be given by them, which bylaws, except so far as they fix the salaries or bonds of such officers, may be amended by the board of directors, such amendment, however, to cease to be valid and effectual for any purpose after any meeting of the stockholders next succeeding the adoption of such amendment unless the same shall be ratified by such meeting by the vote of stockholders representing a majority of the stock of the bank.

Seventh. To act as the financial agent of any nation, Government, State, municipality, corporation, or person, and to perform any and all acts and duties not inconsistent with law that it may undertake and assume as such financial agent, including the sale, exchange, or other disposition of any bonds or other evidences of indebtedness issued by any such Government, State, municipality, corporation, or person, and to act as trustee in any mortgage given to secure such bonds, and to countersign the same as trustee.

Eighth. To carry on the business of banking by discounting and negotiating promissory notes, bills of exchange, drafts, and other evidences of debt; to receive deposits; to buy and sell exchange, coin, and bullion; to issue letters of credit, and to [lend] loan money on personal security, subject to the limits hereinafter imposed; and to borrow money for use in its business in an amount not exceeding fifty per centum of its paid-up capital stock [paid up].

Ninth. To acquire, purchase, hold, and convey real estate for the following purposes, and for no other: (a) Such as shall be necessary for its immediate accommodation in the transaction of its business. (b) Such as shall be mortgaged to it in good faith as security for debts previously contracted. (c) Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings. (d) Such as it shall purchase at sales under judgments, decrees, or mortgages held by it or shall purchase to secure debts due to it. But it shall not hold or be entitled to retain possession of any real estate purchased by it under either of the last three preceding clauses of this section for a longer period than five years.

Tenth. All such incidental powers as shall be necessary to carry on the business of banking under the provisions and terms and for the purposes of this act.

Eleventh. The corporation hereby created shall not have the power and shall not issue notes or obligations in any form to be used and circulated as money within the United States of America, nor shall it make any loan or discount to any person upon the security of shares of its own capital stock, nor shall it purchase or hold any such shares unless it shall purchase the same to prevent loss upon a debt previously contracted with it in good faith, and it shall not hold any stock so purchased or acquired for a longer period than six months from the time of acquiring the same; but it shall be the duty of the board of directors to sell and dispose of all such stock at public or private sale within the period of six months from the time of acquiring the same. SEC. 8. That the said corporation shall not exercise any of the above powers and shall not transact any business, except such as is preliminary to its organization, until authorized by the Comptroller of the Currency, with the approval of the

Secretary of the Treasury,] to commence the business of banking, as hereinafter provided.

SEC. 9. That within ten days after the commissioners to receive subscriptions to its stock shall have transferred to the directors of said corporation the subscription books, records, and money received by said commissioners, the president, cashier, and five directors of the corporation hereby created shall make a statement, under oath, and file the same with the Comptroller of the Currency, showing the number of shares of the capital stock subscribed, the amount of cash paid in on such subscriptions, and the amount in the hands of the board of directors at the time of the making of such statements,] statement, and the names and residences of all subscribers to said capital stock, and the number of shares subscribed for by each of them; whereupon, if it shall appear from such statement that the amount of fifty thousand shares of the capital stock of said company has been subscribed, and that twentyfive per centum of the amount of such subscriptions has in each case been paid in and received by said board of directors, the Comptroller of the Currency [, with the approval of the Secretary of the Treasury, shall issue to said corporation a final certificate, setting forth that the said capital of fifty thousand shares having been subscribed for, and the amount prescribed herein having been paid in thereon, the said corporation is authorized and empowered to commence business, and to exercise all powers and authority herein and hereby granted; and the said corporation shall cause such final certificate issued as is provided in this section to be published in some newspaper of general circulation published in the city of Washington for at least sixty days next after the issuing thereof; and the date of said final certificate shall be held to be the date or period of the organization of said corporation. SEC. 10. That the entire subscription for the capital stock of said company, to the amount of fifty thousand shares, shall be called and fully paid in within two years from the date of the granting of the certificate by the said Comptroller as above provided, and at the times and in installments as follows: Twenty-five per centum as herein before provided in section two; twenty-five per centum within twelve months; twenty-five per centum within eighteen months, and twenty-five per centum within twenty-four months after the date of organization. The president and cashier shall report, under oath, to the Comptroller of the Currency the passage of every [such] resolution of the directors calling for the payment of any installment within five days after it shall be passed, and shall also report to him, within five days after the date fixed by each resolution for the payment of any installment, what amounts have been received upon each of such calls.

SEC. 11. That the principal office and place of business of said corporation shall be in the city of Washington, District of Columbia, or in the city of New York, in the State of New York, as the board of directors shall determine; and the directors shall have power to open such additional branch offices as may be necessary to carry on its business at such points within the United States as the Comptroller of the Currency may approve, and in Mexico, South and Central America, and the West Indies as the said directors shall determine: Provided, That no more than eight such branch offices shall exist at any one time in the United States.

SEC. 12. That the affairs of the corporation shall be managed by a board of twentyfive directors, who shall hold office until their successors are duly elected and qualified. Each director must, so long as he shall hold or be entitled to hold office, be the owner in his own right of not less than one hundred shares of the capital stock of said corporation, the same not being hypothecated or in any way pledged as security for the payment of any loan or debt; and any director who shall cease to be the owner as aforesaid of one hundred shares of the capital stock, or who becomes in any other manner disqualified, shall thereby vacate his office. Not less than fifteen of the directors shall be citizens of the United States. Any vacancy in the board of directors caused by death, resignation, or otherwise shall be filled until the next ensuing election by an appointment by the remaining directors. Each director when elected or appointed shall take an oath that he will, so far as the duty devolves upon him, diligently and honestly administer the affairs of the corporation, and will not knowingly violate, or willingly permit to be violated, any of the provisions of this act, and that he is the owner in good faith and in his own right of the number of shares required by this act, and that the same is not hypothecated or in any way pledged as security for any loan or debt. Such oath, and any other oath required by this act, may be taken before any officer who is authorized to administer oaths by the laws of the United States or by the laws of the State, Territory, or District where the oath may be administered; and when taken in any foreign country any such oath may be administered by a diplomatic or consular representative of the United States, and shall be forthwith filed with the Comptroller of the Currency.

SEC. 13. That there shall be called and held annually, on such day and in such manner as the by-laws may provide, a meeting of the stockholders of the corporation for the election of directors and the ordering of the business and affairs of the corporation generally. If from any cause an election is not made at the time