Sec. 7. After all necessary expenses of a Fed. Res. bank have been paid or provided for, the stockholders shall be entitled to receive an annual Div. of 6% on the paid-in capital stock, which Div. shall be cumulative. After the aforesaid dividend claims have been fully met, all the net earnings shall be paid to the U. S. as a franchise tax, except that 1/2 of such net earnings shall be paid into a surplus fund until it shall amount to 40% of the paid-in capital stock of such bank.

The net earnings derived by the U. S. from Fed. Res. banks shall, in the discretion of the Secy., be used to supplement the gold reserve held against outstanding U. S. notes, or shall be applied to the reduction of the outstanding bonded debt of the U. S. under regulations to be prescribed by the Secy. of the Treas. Should a Fed. Res. bank be dissolved or go into liquidation, any surplus remaining, after the payment of all debts, Div. requirements as hereinbefore provided, and the par value of the stock, shall be paid to and become the property of the U. S. and shall be similarly applied.

Fed. Res. banks, including the capital stock and surplus therein, and the income derived therefrom shall be exempt from Federal, State, and local taxation, except taxes upon real estate.

Sec. 8. Sec. 5154, U. S. Rev. Sts., is hereby amended to read as follows:

Any bank incorporated by special law of any State or of the U. S. or organized under the general laws of any State or of the U. S. and having an unimpaired capital sufficient to entitle it to become a Nat. B'k'g. Asso. Under the provisions of the existing laws may, by the vote of the shareholders owning not less than 51% of the capital stock of such bank or B'k'g. Asso., with the approval of the Comptroller of the Currency be converted into a Nat. B'k'g. Asso., with any name approved by the Comptroller of the Currency:

Provided, however, That said conversion shall not be in contravention of the State law. In such case the Arts, of Asso. and organization C't'f. may be executed by a majority of the directors of the bank or B'k'g. Inst., and the C't'f. shall declare that the owners of 51% of the capital stock have authorized the directors to make such C't'f. and to change or convert the bank or B'k'g. Inst. into a Nat. Asso. A majority of the directors, after executing the Arts. of Asso. and the organization C't'f., shall have power to execute all other papers and to do whatever may be required to make its organization perfect and complete as a Nat. Asso. The shares of any such bank may continue to be for the same amount each as they were before the conversion, and the directors may continue to be directors of the Asso. until others are elected or appointed in accordance with the provisions of the statutes of the U. S. When the Comptroller has given to such bank or B'k'g. Asso. a C't'f. that the provisions of this Act have been complied with, such bank or B'k'g. Asso., and all its stockholders, officers, and employees, shall have the same powers and privileges, and shall be subject to the same duties, liabilities, and regulations, in all respects, as shall have been prescribed by the Fed. Res. Act and by the Nat. B'k'g. Act for Assos. originally organized as national banking Assos.