Section 53. That from and after the passage of this Act no bank shall receive or have on hand deposits exceeding in amount ten times the amount of its paid-up and unimpaired capital.
Comment:—Capital is a sort of insurance fund precisely as reserves are, and there should always be a reasonable relation sustained between capital and deposits.
Section 54. That any national bank may, with the approval of the board of control, establish a branch bank in any town, village, or locality within its own zone and within a radius of twenty miles, where there is no national bank; but such branch bank shall be discontinued as soon as an incorporated bank is established at that point with a capital of at least ten thousand dollars.
Section 55. That whenever any body of men desire to establish a national bank, or to nationalize a private bank, State bank, or trust company, they must first secure the approval of the board of control of the commercial zone in which the proposed bank is to be located; and if such application shall not be approved by the board of control for any reason, the applicant or applicants may then appeal to the board of the bankers' council for approval.
Section 56. That the decision of the board of the bankers' council upon all appeals by applicants for the privilege of starting a national bank shall be final, and their decision shall also be final in all other matters in which appeals may be made from the board of control.
Section 57. That all the rules and regulations under which branches are carried on shall be fixed and established by the board of directors of the American Reserve Bank.
Section 58. That any national bank which has taken out national bank notes for issue and circulation in accordance with this Act shall pay the American Reserve Bank on the tenth days of January and July of each year 1 per centum upon the average amount of notes in actual circulation during the preceding six months.
Comment:—The tax is placed at 2 per cent per annum because that is the usual rate of interest now allowed on good balances all over the United States, and the notes are only another form of deposits made by the public who carry or use the notes.
Section 59. That the tax so paid by the banks upon the national bank notes, as provided in Section 58 of this Act, shall be appropriated for the following uses and purposes:
First: To pay all the expenses of whatsoever kind growing out of the administration of the four organizations established by this Act.