FALSE REPORTS AS TO CONDITION OF NATIONAL AND STATE MEMBER BANKS, ETC.

FEBRUARY 19, 1930.-Referred to the House Calendar and ordered to be printed

Mr. MCFADDEN, from the Committee on Banking and Currency, submitted the following

REPORT

[To accompany H. R. 9683]

The Committee on Banking and Currency, to whom was referred the bill (H. R. 9683) to amend section 22 of the Federal reserve act, having considered the same, report favorably thereon with the recommendation that the bill do pass with the following amendments:

Page 1, line 5, after the word "maliciously," strike out "or".

Page 1, line 10, after the word "which", strike out the words "may tend" and insert the word "tends".

Page 2, line 1, after the word "bank," strike out the words "or which may otherwise injure, or tend to injure the business or good will of such bank,".

Page 2, line 5, after the word "than", strike out $5,000" and insert "$1,000".

Page 2, line 6, strike out "five years" and insert "one year".

Page 2, line 8, after the word "provision," strike out the words "or to boycott, or to blacklist,".

Page 2, line 9, after the word "from," strike out the words "or to cause a withdrawal of patronage from, or otherwise to injure the business or good will of".

Page 2, line 16, after the word "than", strike out "$5,000" and insert "$1,000".

Page 2, line 17, after the word "than", strike out "five years" and insert "one year'

The legislation proposed in this bill has been indorsed by the Treasury Department, the Federal Reserve Board, the American Bankers' Association, and the Chamber of Commerce of the United

It is intended to provide a means to punish the malicious individual who goes about the country and circulates false stories concerning some particular national bank or State member bank of

the Federal Reserve System. There are a number of such instances reported from time to time, and while bank slander bills have been passed in a majority of the States, any one State law does not reach into another State, so that a man who may be in California and maliciously publishes or circulates information derogatory, for instance, to a bank in St. Louis, the State law of Missouri can not reach this man, nor can any law effective in California assume any jurisdiction.

This legislation is undoubtedly needed, as much injury is being done by such slanderers to national and State member banks.

In conformity with section 2a, of Rule XIII, of the House Rules, there is herewith printed section 22 of the Federal reserve act, with the proposed added amendment (subsections (g) and (h) thereto) printed in italics, as follows:

SEC. 22. (a) No member bank and no officer, director, or employee thereof, shall hereafter make any loan or grant any gratuity to any bank examiner. Any bank officer, director, or employee violating this provision shall be deemed guilty of a misdemeanor and shall be imprisoned not exceeding one year, or fined not more than $5,000, or both, and may be fined a further sum equal to the money so loaned or gratuity given.

Any examiner or assistant examiner who shall accept a loan or gratuity from any bank examined by him, or from an officer, director, or employee thereof, or who shall steal, or unlawfully take, or unlawfully conceal any money, note, draft, bond, or security or any other property of value in the possession of any member bank or from any safe-deposit box in or adjacent to the premises of such bank, shall be deemed guilty of a misdemeanor, and shall, upon conviction thereof in any district court of the United States, be imprisoned for not exceeding one year, or fined not more than $5,000, or both, and may be fined a further sum equal to the money so loaned, gratuity given, or property stolen, and shall forever thereafter be disqualified from holding office as a national bank examiner.

(b) No national bank examiner shall perform any other service for compensation while holding such office for any bank or officer, director, or employee thereof.

No examiner, public or private, shall disclose the names of borrowers or the collateral for loans of a member bank to other than the proper officers of such bank without first having obtained the express permission in writing from the Comptroller of the Currency, or from the board of directors of such bank, except when ordered to do so by a court of competent jurisdiction, or by direction of the Congress of the United States, or of either House thereof, or any committee of Congress, or of either House duly authorized. Any bank examiner violating the provisions of this subsection shall be imprisoned not more than one year or fined not more than $5,000, or both.

(c) Except as herein provided, any officer, director, employee, or attorney of a member bank who stipulates for or receives or consents or agrees to receive any fee, commission, gift, or thing of value from any person, firm, or corporation, for procuring or endeavoring to procure for such person, firm, or corporation, or for any other person, firm, or corporation, any loan from or the purchase or discount of any paper, note, draft, check, or bill of exchange by such member bank shall be deemed guilty of a misdemeanor and shall be imprisoned not more than one year or fined not more then $5,000, or both.

(d) Any member bank may contract for, or purchase from, any of its directors or from any firm of which any of its directors is a member, any securities or other property, when (and not otherwise) such purchase is made in the regular course of business upon terms not less favorable to the bank than those offered to others, or when such purchase is authorized by a majority of the board of directors not interested in the sale of such securities or property, such authority to be evidenced by the affirmative vote or written assent of such directors: Provided, however, That when any director, or firm of which any director is a member. acting for or on behalf of others, sells securities or other property to a member bank, the Federal Reserve Board by regulation may, in any or all cases, require a full disclosure to be made, on forms to be prescribed by it, of all commissions or other considerations received, and whenever such director or firm, acting in his

or its own behalf, sells securities or other property to the bank the Federal Reserve Board by regulation, may require a full disclosure of all profit realized from such sale.

Any member bank may sell securities or other property to any of its directors, or to a firm of which any of its directors is a member, in the regular course of business on terms not more favorable to such director or firm than those offered to others, or when such sale is authorized by a majority of the board of directors of a member bank to be evidenced by their affirmative vote or written assent: Provided, however, That nothing in this subsection contained shall be construed as authorizing member banks to purchase or sell securities or other property which such banks are not otherwise authorized by law to purchase or sell.

(e) No member bank shall pay to any director, officer, attorney, or employee a greater rate of interest on the deposits of such director, officer, attorney, or employee than that paid to other depositors on similar deposits with such member bank.

(f) If the directors or officers of any member bank shall knowingly violate or permit any of the agents, officers, or directors of any member bank to violate any of the provisions of this section or regulations of the board made under authority thereof, every director and officer participating in or assenting to such violation shall be held liable in his personal and individual capacity for all damages which the member bank, its shareholders, or any other persons shall have sustained in consequence of such violation.

(g) Whoever maliciously, with intent to deceive, makes, publishes, utters, repeats, or circulates any false report concerning any national bank, or any State member bank of the Federal reserve system, which imputes or tends to impute insolvency, or unsound financial condition, or financial embarrassment, or which tends to cause or provoke, or aid in causing or provoking, a general withdrawal of deposits from such bank, shall be deemed guilty of a misdemeanor and shall upon conviction in any court of competent jurisdiction be fined not more than $1,000 or imprisoned for not more than one year, or both.

(h) If two or more persons conspire to violate the above provision, or to cause a general withdrawal of deposits from any national bank, or any State member bank of the Federal reserve system, and one or more of such parties do any act to effect the object of such conspiracy, each of the parties to such conspiracy shall be deemed guilty of a misdemeanor and shall upon conviction in any court of competent jurisdiction be fined not more than $1,000 or imprisoned for not more than one year, or both. O

CLOSING OF CENTER MARKET IN DISTRICT OF COLUMBIA

FEBRUARY 20, 1930.-Referred to the House Calendar and ordered to be printed

Mr. HALL of Indiana, from the Committee on the District of Columbia, submitted the following

REPORT

[To accompany S. J. Res. 77]

The Committee on the District of Columbia, to whom was referred Senate Joint Resolution No. 77 to provide for the closing of Center Market in the city of Washington, having considered the same, report it to the House without amendment and with the recommendation that it do pass.

Prompt and favorable action on this measure was urged by the Secretary of the Treasury in order that the building program for the Government buildings in the triangle will not be delayed. As soon as the Keyes-Elliott bill becomes a law, it is intended to secure specific authorization for the construction of the building for the Department of Justice on the Center Market site, and failure of the passage of this joint resolution within a reasonable time will interrupt the whole triangle program. Present plans contemplate the letting of the contract for the Department of Justice Building in the latter part of the summer, at which time it is expected that the market will have been razed.

The Board of Commissioners of the District of Columbia have advised this committee recently that they are aware of no reason why this resolution should not be enacted into a law.

O