FepErRAL RESERVE ACT 
the United States as a franchise tax except that the whole of such net earnings, includ- 
ing those for the year ending December thirty-first, nineteen hundred and eighteen, 
shall be paid into a surplus fund until it shall amount to one hundred per centum of 
the subscribed capital stock of such bank, and that thereafter ten per centum of such 
net earnings shall be paid into the surplus. 
The net earnings derived by the United States from Federal reserve banks shall, in 
the discretion of the Secretary, be used to supplement the gold reserve held against 
outstanding United States notes, or shall be applied to t he reduction of the outstanding 
bonded indebtedness of the United States under regulations to be prescribed by the 
Secretary of the Treasury. Should a Federal reserve bank be dissolved or go into 
liquidation, any surplus remaining, after the payment of all debts, dividend require- 
ments as hereinbefore provided, and the par value of the stock, shall be paid to and 
become the property of the United States and shall be similarly applied. 
Federal reserve banks, including the capital stock and surplus therein, and the in- 
come derived therefrom shall be exempt from Federal, State, and local taxation, 
except taxes upon real estate. 
Conversion of State Banks into National Banks 
Sec. 8. Section fifty-one hundred and fifty-four, United States Revised Statutes, is 
hereby amended to read as follows: 
Any bank incorporated by special law of any State or of the United States or organ- 
ized under the general laws of any State or of the United States and having an unim- 
paired capital sufficient to entitle it to become a national banking association under the 
Provisions of the existing laws may, by the vote of the shareholders owning not less than 
fifty-one per centum of the capital stock of such bank or banking association, with the 
approval of the Comptroller of the Currency be converted into a national banking 
association, 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 articles of association and organization certificate may be executed by 
a majority of the directors of the bank or banking institution, and the certificate shall 
declare that the owners of fifty-one per centum of the capital stock have authorized the 
directors to make such certificate and to change or convert the bank or banking insti- 
tution into a national association. A majority of the directors, after executing the 
articles of association and the organization certificate, shall have power to execute all 
other papers and to do whatever may be required to make its organization perfect and 
complete as a national association. 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 association until others are elected or appointed in ac- 
cordance with the provisions of the statutes of the United States. When the Comp- 
troller has given to such bank or banking association a certificate that the provisions 
of this Act have been complied with, such bank or banking association, and all its stock- 
holders, 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 Federal Reserve Act and by the national banking Act for asso- 
ciations originally organized as national banking associations. 
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