closed by the vote of shareholders owning two thirds of its stock, of which vote it shall be the duty of the directors to cause notice, certified under seal by the President and Cashier, to be sent the Comptroller, and have the same published for two months, in a newspaper published in the city of New York, and in a local paper as provided in the case of other notices. The notice shall state that the association is closing up its affairs, and shall notify the holders of its notes and other creditors to present their notes or claims for payment. Such association shall within six months after such vote deposit with the Treasurer of the United States lawful money of the United States sufficient to redeem all its outstanding circulating notes, which money shall be placed to its credit upon "redemption account" and duly receipted for by the Treasurer.

An association which is in good faith winding up its business for the purpose of consolidating with another association, shall not be required to deposit lawful money for its outstanding circulation; but its assets and liabili ties shall be reported by the association with which it is in process of consolidation.

Upon the deposit of sufficient lawful money to redeem its outstanding circulating notes, the United States bonds transferred by such association to the Treasurer of the United States shall be re-assigned to it, and its shareholders are discharged of all liability upon such notes, which shall be redeemed at the Treasury of the United States; but should such association fail within thirty days after the expiration of the time specified to make said deposit, and take up its bonds, the Comptroller may sell the same at public auction in the city of New York, and after providing for the redemption and cancellation of its circulating notes, and expenses of sale, he shall pay over any balance remaining to the bank or its legal representatives.

Redeemed notes shall be destroyed.

Upon the failure of a bank to redeem its circulating notes either at its place of business or designated place of redemption, the holder may cause the same to be protested in one package by a notary public, unless such protest is waived by the President or Cashier of such bank, and he delivers to the party making such demand an admission in writing stating the time of the demand, the amount demanded, and the fact of the non-payment thereof. The notary shall forward such protest or admission to the Comptroller, retaining a copy thereof. If, however, satisfactory proof is produced to the notary public that the payment of the notes demanded is restrained by order of any Court of competent jurisdiction, he shall not protest the same. The holder can recover for only one protest fee on the same day.

Upon such notice of protest of the notes of a bank, the Comptroller may order an examination of such bank by a special agent, and if satisfied by his report, that it has refused to redeem its notes, and is in default, may, within thirty days after the reception of such notice of such failure, declare the bonds deposited by such associa tion forfeited to the United States.

After failure to pay any of its circulating notes, except by order or injunction of Court, such bank is forbidden to continue its business.

Notice shall be given to the holders of the notes of such defaulting bank by the Comptroller to present them for payment at the United States Treasury, and he may cancel an amount of bonds deposited by said bank equal at current market rates, not exceeding par, to the notes paid.

The United States has a first lien upon the assets of all national banks until it has been reimbursed for the amount of any payments made by it on account of the circulating notes of said defaulting association.

The bonds on deposit may be sold at public or private sale by the Comptroller to redeem the circulating notes of any delinquent bank, but at no price less than par or less than the market value at the time of sale.

The Comptroller shall, upon becoming satisfied of the refusal of any national bank to redeem its notes, or of its insolvency, or its violations of those provisions of the National Banking Act, which authorize the appointment of a receiver for a non-compliance, therewith appoint a receiver with the usual powers, and require of him a bond in such sum as he shall deem necessary. The receiver so appointed shall pay over all moneys collected by him to the Treasurer of the United States, subject to the order of the Comptroller. The Comptroller shall, upon the appointment of a receiver, give three months' notice to creditors to present claims against such bank.

It is necessary to say but little more of that part of the national banking law which relates to the dissolution of banks and the placing of them in the hands of receivers, as the law in regard to receiverships, etc., is not wholly covered by the National Banking Act, but is to a large extent that laid down in the Revised Statutes and the Civil Codes of the several States in reference to receiverships in general.

While the statute law on the subject is very strict and rigorous in its dealings with all violators of its commands, or failures to comply with its provisions, yet the extreme penalties provided are not always enforced, as great interests would often be seriously damaged by a rigid enforcement of those provisions which are meant not for the oppression of banks but rather for the protection of the general public. These are considerations which always weigh with the bank examiners and the officials who act upon their reports.

In cases of great money stringency or panics, it is seldom that some of the banks do not violate one or more

of the injunctions of the national banking law; but it would be obviously ruinous, not only to the interests of the community in which such bank is situated, but oftentimes to the country at large, to forfeit the charter of a bank for some minor offence. And while it is not intended that bank officials should be allowed to violate or fail to comply with the law, still it may be remembered that all the actions of the bank examiners and others are or should be tempered by that good sense which is allowed them under the expansive expression, "in the discretion of the Comptroller," and it is wise for all interests that a competent and honest Comptroller should have the right to exercise his discretion.

Upon the putting of a bank into the hands of a receiver, it is then in the hands of the Courts, the same as any other receivership, and is therefore subject to the laws governing receiverships, with the single exception that the circulating notes of such bank, being secured by a deposit of United States bonds, are redeemed by the Government, and the bonds held as collateral sold; the surplus resulting from such sale, after the incidental expenses are paid, is turned over to the receiver and paid. out by him by way of dividends on obligations of the bank. Should a surplus still remain, it is paid over to the shareholders.

All other claims against a defunct national bank are collected in the manner like claims are recovered against any other corporation insolvent or in liquidation.

CHAPTER III.

State Banks-New York State Banks of Deposit, and Banking Law.

State Banks.-State Banks are organized under and exist subject to the laws of the State in which they are located, and inasmuch as we are now the proud possessors of forty-four States, even if some have not yet reached the stage of maturity where they can rejoice in a banking law better than all the others, still there are too many State banking laws to admit of even a digest of them here. It is necessary, however, that the salient features of the banking laws of the State of New York, recognized as one of the best, should be given.

No attempt will be made to explain the cause of the failure of many of the State banking laws prior to 1862, beyond the fact that, in a majority of cases, they imposed insufficient restrictions in relation to the issue of circulating notes, allowing notes to be issued against railroad bonds, and in some instances against real estate; permitting loans on real estate (which is always considered poor policy for a bank of deposit, as real estate is not readily convertible into cash), imposed no extra liability on directors, and permitted the banks' own stock, to be pledged as security for loans; but most important of all, they provided for no given percentage of coin or bullion, or, at any rate, an insufficient percentage for the redemption of circulating notes. The banks, not being required to keep a certain percentage of gold and silver on hand in the shape