National banking under the Federal Reserve System

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Monograph

Identifikator:: 1757542345

URN:: urn:nbn:de:zbw-retromon-135097

Document type:: Monograph

Title:: National banking under the Federal Reserve System

Place of publication:: New York

Publisher:: The National City Bank of New York

Year of publication:: 1927

Scope:: 154 S.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Dividends

Collection:: Economics Books

DIVIDENDS i] oe National Bank Act provides that directors of any national bank “may, semi-annually, declare a dividend of so much of the net profit of the association as they shall judge expedient.” Al- though the word “‘semi-annually” occurs in the language of the act, there appears to be no prohibition against declaration of more fre- quent dividends, when the bank’s directors deem such a course advisable. Within ten days after a dividend has been declared the president or cashier of the bank must attest to the Comptroller under oath the amount of the dividend, and the amount of net earnings in excess of such dividends. A national bank may, with the approval of the Comptroller and of shareholders owning two thirds of its stock, declare a stock dividend (see page 44). Circumstances in which dividends may not be declared are: (a) If the bank’s surplus fund is not equal to 20 per cent. of its capital stock and one-tenth of the net profits for the preceding half year is not carried to surplus. (b) When the bank’s balance at the Federal Reserve Bank is below the amount required by law. (c) If losses have at any time heen sustained equal to or exceeding the bank’s undivided profits then on hand. (d) No dividend shall be made, while a bank continues its operation, to an amount greater than the net profits on hand, minus the bank’s losses and bad debts. “Bad debts” within the meaning of the National Bank Act are those debts on which interest is past due and unpaid for a period of six months. unless such debts are well secured, and in process of collection. 54 |

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