§ 1. Charter, capital, location. The National Reserve Association of the United States ... is created and established for a term of fifty years [with] an authorized capital equal in amount to 20 per cent of the paid-in and unimpaired capital of all banks eligible for membership. . . . $200,000,-000 of the capital stock shall be subscribed and $100,000,000 of its capital shall be paid in cash. . . . The head office shall be located in Washington, D. C.

§ 2. [Corporate powers set forth.]

§ 3. Membership of banks. All national banks, and all banks or trust companies chartered by the laws of any State of the United States or of the District of Columbia, complying with the requirements for membership in the said National Reserve Association . . . may subscribe to its capital to an amount equal to 20 per cent of the paid-in and unimpaired capital of the subscribing banks and not more nor less; . . . Fifty per cent of the subscriptions . . . shall be fully paid in; the remainder . . . shall become a liability of the subscribers, subject to call. . . .

[The subscriptions of State banks or trust companies are made subject to their complying with conditions substantially the same as to amount of capital and surplus, percentage of reserves, etc., and submission to examinations, as those imposed upon the national banks.]

§§4-18 [These sections designate in all needed detail the plans of organization and administration. A committee of three Cabinet officers is designated (§4) to effect the first organization. There are to be fifteen (or more) districts with a branch and a local association of subscribing banks in each district (§5, §6). Each local association [(§7) and each branch (§8) and the whole association (§9) is to have a board of directors, chosen by a somewhat complex method of plural voting, and representing the banks and agricultural, commercial and industrial interests. The board of the National Association is to have as ex officio members the Secretaries of the Treasury, of Agriculture, and of Commerce and Labor, and the Comptroller of the Currency. The "governor" of the Association shall be selected by the President of the United States from a list (§10). Duties of directors in organizing the Association are indicated (§11). Shares of capital stock in the Association are to be owned not otherwise than by subscribing banks (§12). Exemption from local and State taxation except upon real estate (§13). An executive committee (§14) and a board of examination (§15) are to be elected by the Board. Managers of branches (§16). Organization of local associations (§17). List of banks and of shares of stock in the Association to be kept (§18). Several of these features (especially §§7-10) have called forth much discussion because of the fear of centralization of control over the great financial institutions.]

§ 19. Earnings and dividends. The earnings of the National Reserve Association shall be disposed of in the following manner: After the payment of all expenses and the franchise and other taxes not provided for in this section, the shareholders shall be entitled to receive an annual dividend of 4 per cent on the paid-in capital, which dividend shall be cumulative. Further annual net earnings shall be disposed of as follows: First, a contingent fund shall be created, which shall be maintained at an amount equal to 1 per cent, on the paid-in capital, and shall not exceed in any event $2,000,000, and shall be used to meet any possible losses. Such fund shall, upon the final dissolution of the National Reserve Association, be paid to the United States and shall not under any circumstances be included in the book value of the stock or be paid to the shareholders. Second, one-half of additional net earnings shall be paid into the surplus fund of the National Reserve Association until said fund shall amount to 20 per cent of the paid-in capital, one-fourth shall be paid to the United States as a franchise tax, and one-fourth shall be paid to the shareholders, until the shareholders' dividend shall amount to 5 per cent per annum on the paid-in capital: Provided, That no such dividends, exclusive of the cumulative dividends above provided for, shall at any time be paid in excess of 5 per cent in any one year. Whenever and so long as the contingent fund has been provided for and the five per cent dividend has been paid to shareholders, one-half of the additional earnings shall be paid to the United States as a franchise tax. Whenever and so long as the surplus fund of the National Reserve Association amounts to 20 per cent of the paid-in capital and the shareholders shall have received dividends not exceeding 5 per cent., all excess earnings shall be paid to the United States as a franchise tax. § 20. Local associations to guarantee commercial paper. Any member of a local association may apply to such association for a guaranty of the commercial paper which it desires to rediscount at the branch of the National Reserve Association in its district. Any such bank receiving a guaranty from a local association shall pay a commission to the local association, to be fixed in each case by its board of directors. Expenses and losses in excess of commissions shall be met by an assessment of the members of the local association in proportion to the ratio which their capital and surplus bears to the aggregate capital and surplus of the members of the local association, which assessment shall be made by its board of directors, and the commission received for such guaranty, after the payment of expenses and possible losses, shall be distributed among the several banks of the local association in the same proportion. A local association shall have authority to require security from any bank offering paper for guaranty, or it may decline to grant the application. The total amount of guaranties by a local association to the National Reserve Association shall not at any time exceed the aggregate capital and surplus of the banks forming the guaranteeing association.

§ 21. Local associations and clearing houses. Any local association may by a vote of three-fourths of its members and with the approval of the National Reserve Association, assume and exercise such of the powers and functions of a clearing house as are not inconsistent with the purposes of this act. The National Reserve Association may require any local association to perform such services in facilitating the domestic exchanges of the National Reserve Association as the public interests may require.

§ 22. Functions of the National Reserve Association. All of its privileges and advantages . . . shall be equitably extended to every bank of any of the classes herein defined which shall subscribe to its proportion of the capital stock and shall otherwise conform to the requirements of this act. [Proviso, power of suspending a bank.]