the national banks in the country are obtainable only through reports compiled at the calls of the Comptroller of the Currency, and that these calls vary in number and dates from year to year. For the compilations set forth here, figures have been drawn from returns to calls falling the nearest to December 31 of the last year of the period concerned, except in reference to the stock of money in the United States, and national bank circulation, where June figures are used. NATIONAL BANK ORGANIZATION HE detailed steps in the organization of a national bank are as follows: THE I-Determination of amount of bank's capital. 2-Organization application. 3-Disposal of capital stock. 4-Execution of Articles of Association. 5-Execution of Organization Certificate. 6-Election of directors. 7-Appointment of officers. 8-Initial payment of capital. 9-Beginning business. 10-Subscription to stock in Federal Reserve Bank. 1. Amount of capital-Since it is necessary to state the amount of any proposed national bank's capital in the first formal communication to the Comptroller of the Currency, the determination of the amount of this capital may properly be said to be the first preliminary step in national bank organization. The capital necessary for the organization of a national bank is: Where a national bank is organized in a suburban district included within the political boundaries of a city, the bank must have a capitalization equivalent to the amount of capital required of a bank located in the city in question. 2. Organization Application-Preliminary to the formal application to organize a national bank it is customary for those interested in the prospective financial institution to write the Comptroller of the Currency at Washington, requesting reservation of the title under which the bank is to be known, and stating the location and proposed capital. The title asked for will be reserved for fifteen days, before the expiration of which time it is expected that formal application to organize will be filed with the Comptroller. Forms for the application to organize a national bank are furnished by the Comptroller of the Currency-and minute care should be exercised in filling out these papers. All of the information requested should be given, and the instructions contained in the forms should be carefully followed. The application must be signed by at least five prospective shareholders of the association, and indorsed by three prominent public officials, preferably the mayor and postmaster of the place where the bank is to be located, and a judge. Exclusion of any professional promoters from the organization will be required. No commissions paid for the sale of stock or promotion fees should be included in the bank's organization expenses, but only such legitimate other expenses as are incident to the actual organization of the bank. If any agreement exists to use subsequently any part of the capital stock, surplus or undivided profits, to pay promoters' expenses, favorable consideration will not be given to the application. Letterheads bearing the bank's name which are in use before the bank is given permission to begin business should indicate that the bank is organizing, or bear the heading "Organization Committee." Accompanying the application to organize a national bank should be a draft for $100 payable to the order of the Comptroller. This sum is to cover expenses incurred in investigating the proposed bank. A bank examiner will be sent to the town in which the bank is to be located, and he will give consideration to the general character and experience of those who are to conduct the bank's affairs; to the question of whether there is need for additional banking facilities in the community; to the community's prospect for future development; to the methods and banking practices of existing banks; to prospects of success for the proposed banks under efficient management. The Comptroller also obtains reports on the situation from the Fed eral Reserve Bank of the district, from the State Banking Department, and from other sources. Upon the approval by the Comptroller of the organization of the proposed bank, all the necessary blanks for use in connection with the organization will be furnished, with instructions for their proper execution. The title applied for will be reserved for sixty days more, during which period it is expected the organization of the bank will be completed. 3. Disposition of capital stock-After the bank has received permission to organize, subscription contracts, to be signed by the prospective shareholders, are usually drawn up. Forms for such contracts are NOT furnished by the Comptroller, but it will be found serviceable if each subscriber is required to give not only his signature, but his address, occupation, statement of his net financial worth, and the number of shares to which he subscribes. The stock of a national bank must be divided into shares of $100 each, and the Comptroller recommends that all organizing national banks sell their stock at a premium, thereby creating a surplus from which to pay organization expenses, which, with salaries, frequently prove a drain upon capital during the early months of the bank's existence. Where no surplus is created through premium, the Comptroller recommends that no dividend be paid until a substantial surplus has been created by earnings. Payment of the capital stock is treated in Paragraphs 8 and 10 of this chapter. 4. Articles of Association-At least five persons, the majority of whom are subscribers to stock of the proposed bank, must sign the institution's Articles of Association, which are drawn up and executed in duplicate. One copy is retained by the bank, and another is filed in the Comptroller's office. The persons uniting to organize a national bank must be individuals who can hold and control property in their individual right— not corporations, firms, or associations of any character. A form for typical Articles of Association is given at the end of this chapter. (Page 32.) |