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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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Changes in capital

Collection:: Economics Books

CHANGES IN CAPITAL The initial proceedings in a stock dividend increase are the same as in an ordinary increase of capital, that is, the submission to the Comptroller of a formal application from the Board and report of the vote of the shareholders authorizing the capital increase. In addition there is required a report of the dividend and cer- tification by the president, vice-president or cashier of the payment of the increase. The increase in capital is not effective until it has been certified to the Comptroller, and until his certificate has been obtained specifying the amount of his increase and stating his approval. It is permissible to effect an increase of capital in whole or in part by means of a stock dividend. When any bank that is a member of the Federal Reserve System increases its capital and surplus, it is obliged to file with its Federal Reserve Bank an application (form furnished by Federal Reserve Bank) for an additional amount of capital stock of the Federal Reserve Bank of its district equal to 6%, of such increase. Upon approval of the application by the Federal Reserve Agent, and the Federal Reserve Board, the applying bank pays to its Federal Re- serve Bank one-half the amount of its additional subscription; the remaining half is subject to call when deemed necessary by the Federal Reserve Board. Federal law makes no provision governing the distribution of new national bank stock when the capital is increased, but under the common law, (where not modified by statute) the shareholders of a corporation have the right to participate in the increase in capital proportionately to the number of shares held by each. Waiver of that right should be obtained before allotting any of the shares to others. The right of a shareholder to subscribe to new stock, how- ever, must be exercised within a fixed or reasonable period of time. 2. Reduction of Capital—Approval of the Comptroller and also of the Federal Reserve Board must be obtained before a national bank may reduce its capital stock. A bank contemplating such action should advise the Comptroller, giving the reasons for the proposed reduction, and should similarly advise the Federal Reserve Bank of its district. On receipt of the application, the Comptroller will advise the bank what conditions must be met before approval may be given, viz.: | i io

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