National banking under the Federal Reserve System

Bibliographic data

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:: Consolidation

Collection:: Economics Books

CONSOLIDATION the value of the capital stock, it is necessary to furnish to the Comp- troller’s office a sworn certificate, executed by the president or cashier of the consolidated bank, showing that such increase has been paid in cash. Bonds (on deposit to secure circulation) held by either bank in excess of the capital of the consolidated bank, must be withdrawn before the consolidation is approved by the Comptroller’s office. These bonds will be released upon the deposit of lawful money to retire outstanding surplus circulation, providing the usual technicali- ties are complied with. If bonds are to be transferred to the consoli- dated bank, it will be necessary only to furnish the Treasurer’s receipts to the Comptroller. Under the Federal Reserve Act, shares of the capital stock of Federal Reserve Banks owned by member banks cannot be trans- ferred or hypothecated. This provision prevents a transfer of Federal Reserve stock by purchase, but does not prevent a transfer by operation of law. Thus, when two or more national banks con- solidate, the consolidated bank continues the corporate identity of one of the consolidating banks, and the consolidated bank becomes owner of the Federal Reserve stock of the other consolidating banks as soon as the consolidation takes effect. In the event that the con- solidation results in a change of title, the certificates of stock issued in the names of the consolidating banks should be surrendered and cancelled, and a new certificate will be issued. 2. Consolidation with one bank liquidating—Where the capital of the absorbing bank is not to be increased by consolidation, the di- rectors of that bank may enter into a contract with the directors or agents of the liquidating bank to purchase its assets, assume its liabilities, and to pay the value of assets purchased in excess of liabilities to depositors and other creditors, minus any expense inci- dent to liquidation. If the capital stock of the absorbing bank is to be increased by an amount equal to the stock of the liquidating bank, the additional shares may be sold to the stockholders of the liquidating bank, with the consent of the shareholders of the absorbing bank. Providing thus for the shareholders of the liquidating bank, the directors of the continuing bank contract to take over the assets and liabilities of the liquidating bank. [51

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