AN ACT CREATING THE PHILIPPINE
NATIONAL BANK.
By authority of the United States, be it
enacted by the Philippine Legislature, that:
SECTION 1. There is hereby created a bank to be known as the Philippine
National Bank, the short title of which shall be the National Bank. Its
principal domicile and place of business shall be in the city of Manila.
SEC. 2. The said National Bank, upon its organization, shall be a body
corporate and shall have power:
(a) To prescribe its by-laws;
(b)
To adopt and use a seal;
(c) To make contracts;
(d) To sue and be
sued;
(e) To exercise the powers granted in this Act and such incidental
powers as may be necessary to carry out the business of banking within the
limitations prescribed by this Act; and
(f) To exercise, further, the
general powers mentioned in the Corporation Law in so far as they are not
inconsistent or incompatible with the provisions of this Act.
SEC. 3.
The capital of the National Bank shall be twenty million pesos, Philippine
currency, divided into two hundred thousand snares of the value at par, of
one hundred pesos, Philippine currency, each.
Shares of stock
subscribed from the passage of this Act until January thirty-first, nineteen
hundred and seventeen, shall be paid as follows:
Sixty per cent' of
the value at the time of the subscription;
Ten per cent on or before
January thirty-first, nineteen hundred and eighteen;
Ten per cent on
or before January thirty-first, nineteen hundred and nineteen;
Ten
per cent on or before January thirty-first, nineteen hundred and twenty; and
the remaining
Ten per cent on or before January thirty-first,
nineteen hundred and twenty-one.
Shares subscribed after January
thirty-first, nineteen hundred and seventeen shall be paid in the form and
manner prescribed by the board of directors of the bank.
The
certificate of shares shall clearly set forth:
(a) The part of the value
paid up;
(b) The form and conditions under which subsequent payments
shall be made, as well as the penalty incurred in case of delinquency.
The penalty for delinquency in every case shall be fixed by the board of
directors.
SEC. 4. The Government of the Philippine Islands not later
than January thirty-first, nineteen hundred and seventeen, shall purchase
one hundred and one thousand shares, at par, of the said National Bank, the
payment for said shares of the Government to be made as hereinafter
provided. Ninety-nine thousand shares of said capital stock shall be offered
to the public at par, as hereinafter provided.
SEC. 5. The following
sums are hereby appropriated for the payment of the shares to be purchased
by the Government of the Philippine Islands.
(a) The sum of one
million three hundred thousand pesos which is hereby appropriated out of any
funds in the Insular Treasury not otherwise appropriated;
(b) One million
pesos, on or before July thirty-first, nineteen hundred and sixteen, and
another one million pesos on or before January thirty-first, nineteen
hundred and seventeen, which shall be invested from the insurance fund
created by Act Numbered Seventeen hundred and twenty-eight, the public works
bonds sinking fund, created by Act Numbered Seventeen hundred and
twenty-nine, and the friar lands bonds sinking fund, created by Act Numbered
Twenty-five hundred and fifty: Provided, however, That should in
any year the interest earned by stock held for the benefit
of such funds not equal at least four per centum per annum, the Insular
Treasurer shall pay r into each of such said funds the sum necessary from
any v money not otherwise appropriated in the Insular Treasury, and for this
purpose there is hereby appropriated such amount or amounts as may be
necessary to make the earnings of such sum or sums so invested in National
Bank stock equivalent to four per centum per annum of the funds so invested;
but should in any succeeding year the sum earned by such investments of the
proceeds of the funds herein described in the stock of the National Bank
exceed four per centum per annum on the amount or amounts so invested, the
Insular Treasury shall be reimbursed from the earnings in excess of four per
centum per annum for any money paid into such funds in accordance herewith: And
provided further, That at such time as the Governor-General shall
direct, not later than five years before the payable date of such bonds, the
stock of the National Bank purchased for the benefit of said funds shall be
purchased by the Government from any funds of the Philippine Government not
otherwise appropriated at a price not less than the par value of such stock
plus such portion of the surplus earned by said National Bank stock ratable
to the stock issued, and such sum or sums as may be necessary for such
purposes are hereby appropriated. There is hereby created a continuing
appropriation from an any funds in the Insular Treasury not otherwise
appropriated, as follows: On January thirty-first, nineteen hundred and
seventeen, and on each succeeding anniversary thereof, to and including
January thirty-first, nineteen hundred and twenty-one, one million pesos,
which sums as appropriated shall be invested by the Insular Treasurer
-without further authorization in the stock of the National Bank herein
created. The foregoing appropriations in this section provided shall be
considered payments finally to complete the purchase of the said one hundred
and one thousand shares of the stock of the National Bank which the
Government of the Philippine Islands is obligated to purchase under section
four of this Act: And provided further, That the voting power of all
stock purchased directly by the Philippine Government as an investments from
the general funds of the Government, and the voting power of all stock
purchased for the benefit of the insurance fund, of the public works bonds
sinking fund, and of the friar lands bonds sinking fund, shall be vested j
exclusively in the Governor-General.
SEC. 6. All the assets and
liabilities of the Government Agricultural Bank of the Philippine Islands,
created under Act Numbered Eighteen hundred and sixty-five, as amended,
shall be transferred to the National Bank: Provided, That the
transfer of the assets of the Agricultural Bank -represented by the capital
and the net profits thereof shall! Be made as part payment of the one
hundred and one thousand shares subscribed by the Government of the
Philippine Islands. This transfer shall be understood as taking place upon
the inauguration of the National Bank in conformity with the provisions of
section nine of this Act, after which the National Bank shall be subrogated
to all the rights, actions and obligations of the Agricultural Bank, and the
Agricultural Bank shall thereafter be deemed abolished.
SEC. 7. Any
loan or credit account transferred to the National Bank by the Agricultural
Bank which, in the judgment of the board of directors of the National Bank,
is found upon demand after its maturity to be uncollectible, shall be
redeemed by the Government and become the property thereof: Provided,
That by the agreement between the Insular Treasurer and the National Bank,
that said National Bank may renew such credits for a period not exceeding
five years without losing the benefit of the above guaranty. There are
hereby appropriated, out of any funds in the Insular Treasury not otherwise
appropriated, such sums as may be necessary from time to time to make such
payments.
SEC. 8. At no time shall shares be sold to the public if,
as a result thereof, the part of the capital stock held by private investors
will equal or exceed the part owned by the Government of the Philippine
Islands.
SEC. 9. The National Bank shall be inaugurated within one
hundred and eighty days from and after the passage of this Act, and the
Governor-General shall fix such inauguration by proclamation upon the
certificate of the Insular Auditor and the president of the bank that said
institution is ready to begin operations.
SEC. 10. Said National Bank
is hereby authorized to loan not to exceed fifty percent of its capital and
surplus and all amounts realized from the sale of real estate bonds, as
provided in section fifteen herein, on notes secured by real estate
mortgages. Payment of such notes shall be secures by first mortgages on farm
lands in the Philippine Islands, and in no case shall such loans
exceed sixty percent of the actual value of said land, exclusive of
buildings: Provided, however, That where buildings or machinery for
the preparation or manufacture of sugar, copra, or other staple products of
the Philippine Islands have been erected on real estate, said buildings and
machinery may be appraised as a part of said real estate, in which case
the mortgages shall contain a clause obliging the mortgagor to insure to
their full value in the name of the National Bank such buildings and
machinery. The due date of said mortgages shall not be less than one
year from the date thereof, nor more than thirty years. The said
mortgages may, by their terms, be made payable at one time or in
installments: Provided, That when the due date of the mortgage is
more than five years after the date of execution, the principal and interest
of the loan shall be made payable by its terms in equal installments of not
more than one year each. Loans made by the National Bank on real
estate security shall be made for the purpose of promoting agriculture.
Application for such loans shall be in writing and under oath. The
said applications shall contain, among other things:
(a) A detailed
description of the real estate;
(b) An appraisal thereof at its
reasonable market value;
(c) A full statement of the purposes for which
the loan is desired.
It shall be unlawful to use the proceeds of said
loan, or any part thereof, for any purpose or purposes except the purpose or
purposes set out in said application. Any violation of this clause
shall be sufficient cause for the rescission of the contract and the
foreclosure of the mortgage.
SEC. 11. Said National Bank is hereby
authorized to loan not to exceed thirty per cent 01 its capital and surplus
and the full amount of circulating notes provided for in section eighteen
hereof on promissory notes, drafts and bills of exchange issued or drawn for
agricultural, industrial or commercial purposes, or the proceeds of which
have been used or are to be used for such purposes. Notes, drafts and bills
of exchange admitted to discount under the terms of this section, must have
a maturity at the time of discount of not more than one hundred and twenty
days. Said National Bank may also discount acceptances which are made upon
the importation and exportation of goods, which said acceptances have a
maturity at the time of discount of not more than one hundred and twenty
days: Provided, however, That said bank may at any time, by and with
the written consent of the Governor-General, reduce that part of the capital
and surplus available under this section by transferring any part or portion
of the same not in use to that part of the capital and surplus available
under section twelve whereupon the same shall become available in addition
to the amount provided in said section twelve for loans under that section.
Any such sum so transferred may be returned for use under this section at
the discretion of said bank.
SEC. 12. Said National Bank is hereby
authorized to make loans of not to exceed twenty per cent of its capital and
surplus, seventy per cent of its deposits subject to check, and eighty-five
per cent of its time deposits on any classes of bankable paper not intended
for use under sections ten or eleven herein: Provided, however, That
the restriction contained in this section shall not be applicable to
mortgage loans made by the Agricultural Bank with funds derived from
deposits of all kinds made with the said Bank and transferred to the
National Bank in accordance with section six of this Act.
SEC. 13. In
the application of the thirty and twenty per cent specified in sections
eleven and twelve of this Act, preference shall be given to the loans
mentioned in section fourteen hereof.
SEC. 14. Said National Bank is
further authorized:
(a) To make loans on harvested and stored crops: Provided,
That no loan on the security of such harvested and stored crops shall exceed
seventy per centum of the market value thereof on the date of the loan: And
provided further, That the crops so mortgaged shall be insured by the
mortgagor for the benefit of the National Bank for their entire market
value: And provided finally, That if, owing to any circumstance
whatever, the value of the crops given as security shall diminish, the
mortgagor shall obligate himself to furnish additional security or refund
such part of the loan as the Bank may deem necessary. Such loans shall be
granted for a period of three months, subject to three months' extension, in
the discretion of the Bank.
(b) To make loans to agriculturists in
installments, on standing crops of the natural products of the Philippine
Islands, such as rice, hemp, copra, sugar, tobacco, etc.: Provided,
however, That before granting such loans, the National Bank may require
additional security in the nature of mortgages on real estate duly
registered in the name of the debtor or chattel mortgages, including those
upon livestock, machinery, and agricultural implements.
The amounts
which may be used for loans referred to by this section shall be taken out
of the thirty per centum and twenty per centum of the capital and surplus of
the Bank and of such other funds and resources thereof as are mentioned in
sections eleven and twelve which may be used for such loans as well as in
such other transactions mentioned in said sections in the discretion of the
board of directors of the Bank.
SEC. 15. The National Bank is hereby
authorized to issue real estate bonds in any sum not to exceed ninety per
cent of the amount of real estate loans held by said bank, under section ten
herein. Said bonds shall be engraved. Said bonds shall be signed by the
president of the bank, authenticated by the Insular Auditor and shall bind
the bank to pay the bearer thereof on the date therein named the principal
sum mentioned in said bond with interest payable semi-annually at such rate
as the board of directors may fix.
Said bonds shall be payable, both
principal and interest, in gold coin of the United States: Provided,
however, that bonds held by persons or corporations resident in the
Philippine Islands shall be payable in lawful money of the Philippine
Islands, or in gold coin of the United States at the option of the said
bank. The amount of said real estate bonds outstanding as herein provided,
falling due on any given date or prior to such given date, shall never at
any time exceed the real estate notes as described in section ten herein
held by the said bank, which fall due on the said given date or prior
thereto.
Said real estate bonds shall be receivable by the Insurance
Commissioner under section one hundred and seventy-eight of Act Numbered
Twenty-four hundred and twenty-seven. Said bonds shall also be receivable by
way of security in all customs and internal revenue transactions where
security is required, and in any and all cases where by statute security may
be required in dealings with the Government. Said bonds shall be
exempt from any and all taxes levied or assessed by the Government of the
Philippine Islands, or any department, division or subdivision thereof.
Said real estate securities against which bonds are issued as provided
herein shall be deposited with the Treasurer of the Philippine Islands, and
each of said bonds when issued shall bear on its face a certificate of the
Insular Treasurer in words and figures as follows:
"I hereby certify
that there are on deposit in the Treasury of the Philippine Islands first
mortgage real estate farm securities in the sum of one hundred eleven and
one-ninth per cent (111 1/9%) covering farm land of an appraised value of
one hundred eighty-five and five twenty-sevenths per cent (185 5/27%) of the
face value of this bond;. Which said real estate farm securities or other
first mortgage real estate farm securities of equal value or the proceeds
thereof are to be held by me as security, additional to the promise of the
Philippine National Bank for the prompt payment of this bond, principal and
interest.
......................................................
"Treasurer of the Philippine Islands."
Changes in this Act or in
the laws of the Philippine Islands which may hereafter be made shall not in
any manner affect the real estate bonds issued hereunder which may be
outstanding at the time of such change or changes, nor shall any such change
or changes affect the rights of any holder or holders thereof.
The
principal and interest of said real estate bonds shall -be payable in Manila
or New York, at the option of the r holder thereof except as hereinafter
provided.
SEC. 16. Said bonds shall be issued in such amounts and
form, at such times, and for such periods as may be expressly provided by
resolution of the board of directors of the Philippine National Bank. Said
bonds shall be redeem- -able at par on or before the date of their maturity
and shall contain a provision to the effect that they are subject to
redemption by lot at such date as the bank may designate: Provided,
however, That such of the bonds so chosen by lot for redemption as have
not been outstanding for at least three-fourths of the period for which
issued shall be retired with a premium of five per centum of the par value
thereof. The bonds so chosen for redemption shall cease to bear interest
beginning with the date set for their withdrawal, and the aforesaid
selection by lot shall take place at least one hundred days before the date
of the withdrawal: And provided, That the serial numbers of the bonds
so selected shall be published for a period of not less than three months in
two daily newspapers of general circulation in the Philippine Islands, and
by notification of the Bureau of Insular Affairs at least three months
before said redemption.
SEC. 17. The board of directors may, at the
request of the holder, authorize the payment of the interest on any bond at
the branches or agencies of the bank in the municipalities of the Philippine
Islands or in the United States.
SEC. 18. Said National Bank is
hereby authorized to issue its notes, which said notes shall be known as
circulating notes. Said notes shall never be issued in any amount exceeding
seventy-five per cent of the securities held by said National Bank, under
above section eleven: Provided, That the total amount of such
circulating notes outstanding at the end of the first year said bank
commences the transaction of business shall not exceed twenty per cent of
the capital and surplus of said bank; and that the total amount of said
circulating notes outstanding at the end of the second year shall not exceed
thirty per cent of said capital and surplus, and that the total amount of
said circulating notes outstanding at the end of the third year shall not
exceed forty per cent of said capital and surplus, and that the total amount
of said circulating notes outstanding at the end of the fourth year shall
not exceed fifty per cent of said capital and surplus, and that the total
amount of said circulating notes outstanding at any time shall not exceed
sixty per cent of the full amount, of said capital and surplus. The said
securities described in section eleven and the proceeds thereof shall be
held inviolable for the payment and redemption of said circulating notes.
Said circulating notes shall be engraved and shall be payable on demand to
the bearer in lawful money of the Philippine Islands. There shall at all
times be held by said bank a sum not less than thirty-three and one-third
per cent of the total amount of said circulating notes outstanding in lawful
money of the Philippine Islands. Said sum shall be available only for
the purpose of redeeming the circulating notes herein provided for. Said
circulating notes shall be exempt from any and all taxes levied or assessed
by the Philippine Government, or any department, division or subdivision
thereof.
It is hereby further provided that in addition to the
circulating notes above provided for, said National Bank shall have
authority to issue its circulating notes against gold coin of the United
States to the full value thereof: Provided, however, That such gold
coin against which circulating notes have been issued shall be held by said
bank and used for no other purpose except the redemption of said circulating
notes. The said bank, however, shall have the privilege of redeeming said
circulating notes in any lawful money of the Philippine Islands. Such
circulating notes shall be exempt from any and all taxes levied or assessed
by the Philippine Government, or any department, division or subdivision
thereof. The said circulating notes shall be receivable by the
Philippine Government in payment of all taxes, dues or other claims due or
owing to said Government.
SEC. 19. The Philippine National Bank is
hereby authorized to receive deposits of funds of the Insular Government,
the provinces, municipalities, Postal Savings Bank, associations,
corporations, and private persons, and it is hereby made obligatory for the
aforesaid Insular, provincial, and municipal governments to make their
deposits in the National Bank. The interest paid by said bank on deposits so
made shall not exceed four per centum per annum: Provided, however,
That whenever in the judgment of the Governor-General it is in the public
interest to make deposits from public funds in other banks he is hereby
authorized to cause the same to be done under such terms and conditions as
he may deem proper.
SEC. 20. The affairs and business of the National
Bank shall be managed by a board of directors consisting of the president of
the bank, who shall be chief executive thereof and chairman of the board at
the same time, one vice-president, who shall assist the president and act in
his stead in case of absence or incapacity, and five members elected as
hereinafter provided.
The president of the bank shall have power to make
loans on commercial paper for periods of time not to exceed four months and
in sums not exceeding fifty thousand pesos in any one case, but he is
required to submit a report on each such loan to the board of directors at
its next succeeding session. It shall also be his duty-
(a) To make, with the advice and consent of the board of directors, all
contracts on behalf of the said bank and to enter into all necessary
obligations by this Act required or permitted;
(b) To report weekly to
the board of directors the main facts concerning the operations of the bank
during the preceding week and to suggest changes in rates of discount,
exchange, or of policy which may to him seem best ;
(c) To furnish, upon
request of the Governor-General of the Philippine Islands, any information
in his possession regarding the operations of said bank.
SEC. 21. The
president and vice-president shall be appointed by the Governor-General, by
and with the consent of the Upper House of the Philippine Legislature, and
may be removed for cause by said Governor-General, by and with the consent
of said House. The five remaining members shall be elected and may be
removed in accordance with the provisions of Act Numbered Fourteen hundred
and fifty-nine, the Corporation Law.
SEC. 22. All the other officers
and employees of said National Bank shall be appointed and removed by the
president P thereof: Provided, however, that for the appointment and
removal of those receiving more than two thousand pesos per annum, the
approval of the board of directors shall be required. The officers and
employees of said bank shall not be subject to the Civil Service Law, and
their duties and compensations shall be fixed by the president with the
approval of the board of directors.
SEC. 23. The president of the
National Bank shall, before d assuming charge of the government thereof,
furnish bond in a sum of not less than two hundred and fifty thousand pesos,
and the vice-president shall furnish bond in the sum of one hundred thousand
pesos for the faithful performance of their duties. Each of the other
members of the board of directors, shall furnish a like bond of ten thousand
pesos.
SEC. 24. All the other officers and employees of said National
Bank or any branch thereof, shall, before entering p upon the performance of
their duties, furnish a fidelity bond for the benefit of said National Bank,
in the form and amount prescribed by the board of directors of the National
Bank. For this purpose, all officers and employees of the National Bank
shall be deemed public officers and employees, respectively, and the
provisions of Act Numbered Twenty-four hundred and thirty-six, of the
Philippine Legislature, creating the fidelity fund, are hereby made
applicable to all said officers and employees.
SEC. 25. The
Attorney-General of the Philippine Islands shall be attorney for said
National Bank: Provided, however, that the board of directors of said
bank shall have power to employ other attorneys in special cases.
Sec. 26. The Insular Auditor shall be ex officio auditor of the National
Bank and it shall be his duty to make an examination of the books and the
administration of the bank at least once every three months and report
thereon to the Governor-General of the Philippine Islands and the board of
directors of said bank.
SEC. 27. The National Bank shall be subject
to inspection by the Insular Treasurer with regard to its solvency in the
manner provided by law.
SEC. 28. The Secretary of Finance and
Justice, the Insular Treasurer, and the Insular Auditor are hereby
prohibited from owning stock in the National Bank, or from becoming indebted
to said National Bank, directly or indirectly, in any sum.
SEC. 29.
The Insular Treasurer and Auditor or other officers designated by law to
inspect or investigate the condition of said National Bank shall not reveal
to any person other than the Governor-General and the board of directors the
details of the inspection or investigation, nor shall they give any
information relative to the funds in its custody, its current accounts or
deposits belonging to private individuals, corporations, or any other
entity, except by order of a court of competent juris diction.
SEC.
30. The president of the National Bank shall be appointed for a term of six
years. In case he is a person not in the service of the Insular Government
at the time of his nomination, he shall receive an annual salary of
twenty-four thousand pesos, and in case he is in the service of the Insular
Government or of the provincial oi municipal governments of the Philippine
Islands, or of the municipal government of the city of Manila, or in the
service of the said National Bank at the time of his nomination as such
president at any time within the period of one year next preceding such
nomination, he shall receive a salary of twenty thousand pesos per annum.
The vice-president shall hold office for a like term as the President and
shall receive an annual salary of twelve thousand pesos: Provided,
however, that the vice-president shall receive the same salary as the
President when acting in the stead of the latter. The other five members of
the board of directors shall hold office for one year and receive per diems
of twenty pesos for each meeting actually attended by them.
SEC. 31.
The stockholders shall meet on the first Tuesday after the first Monday in
March of each year to elect the five directors or members of the board of
directors for the current year, each stockholder or his authorized proxy
being entitled to as many votes as there were shares registered in his name
on January thirty-first immediately preceding and owned by him on the date
of election.
SEC. 32. The board of directors created by section
twenty of this Act shall have general supervision, management, and control
of the affairs of said bank and shall from time to time fix the rate of
interest, discount or exchange to be charged by said bank and make public
announcement of the same at the head office. The board of directors may also
fix different rates of interest on loans in accordance with the different
classes of securities herein specified: Provided, that it shall not
be lawful for said National Bank to charge interest on overdrafts. The board
of directors shall make and publish semiannually a general balance of the
business of said bank.
SEC. 33. The said National Bank, by this Act
created, may establish not to exceed two branches or agencies in the United
States of America, at such points as may be determined upon by the board of
directors of the said National Bank. It shall be the function of each
of the said agencies-
(a) To receive, transmit and disburse any funds
of the Philippine Government payable in the United States.
(b) To
receive, transmit and disburse any funds of the United States Government
which may be placed on deposit with, or entrusted to it.
(c) To receive,
transmit and disburse any funds of individuals, firms, companies or
corporations engaged in business with the Philippine Islands, or having
interests therein.
(d) To engage in business to the extent permitted by
law of the United States with the Federal Reserve Bank of the district in
which said branches or agencies may be located, and if and when permitted by
law of the United States, to conduct a deposit and discount business with
the said Federal Reserve Bank to the extent that conditions may require,
under the instructions of the board of directors of the said National Bank.
SEC. 34. The National Bank may establish branch banks t in the
provincial capitals and in those municipalities in which, in the judgment of
the board of directors, the industrial, commercial, or agricultural movement
may require it. The agents and other officers and employees of said;
branch banks shall be appointed and may be removed in accordance with the
provisions of section twenty-two of this Act, and shall furnish bond in a
sum to be fixed in each case by the board of directors.
With the
authorization of the Governor-General first had, the board of directors may
appoint as agents, cashiers or tellers of said banks the provincial or
municipal treasurers, who shall in this case furnish such bond and receive
such additional compensation as the bank may determine, and shall be
removable from office, not only as such agents, cashiers, or tellers, but
also as such provincial or municipal treasurers, by the Governor-General,
for violation of the provisions of this Act or of the by-laws of the bank or
any instructions received by them from said bank.
SEC. 35. The branch
banks of the National Bank are authorized to exercise the powers conferred
upon them by the board of directors of the bank.
SEC. 36. The branch
banks shall make detailed daily reports of their transactions to the central
office of the National Bank at Manila, and shall submit to a periodical
examination by an examiner to be designated by the board of directors of the
National Bank.
SEC. 37. The National Bank shall never at any time,
under any circumstances, directly or indirectly grant to any individual,
company of individuals, firm, corporation, Insular, provincial or municipal
government any real estate mortgage loan exceeding the sum of fifty thousand
pesos, or any -other loan exceeding the sum of three hundred thousand
pesos: Provided, That nothing contained in this section shall be
construed to prevent the National Bank from taking over and extending upon
terms and conditions which to the board of directors shall seem just for a
period of not exceeding five years the loans already made and outstanding at
the " time of the passage of this Act by private banks with Government funds
deposited in said banks, but in no event shall the amount of said loans thus
taken over by the National Bank exceed one million five hundred thousand
pesos, and no part of such loans so taken over shall be considered as
subject to any restrictions elsewhere provided in this Act as to the amount
of its capital which may be used by said bank for any specific purpose, and
in this case it shall be the duty of the Insular Treasurer to keep on
deposit in the National Bank a sum equivalent to the total amount of said
loans for a period of time not exceeding five years.
SEC. 38. The
National Bank shall not directly or indirectly grant loans to any of the
members of the board of directors of the bank nor to agents of the branch
banks. Said National Bank is hereby prohibited from making any loan directly
or indirectly in excess of one thousand pesos to any member of the
Philippine Legislature or to any official or employee of the Insular,
provincial, or municipal governments except upon satisfactory real estate
security.
SEC. 39. The National Bank is hereby authorized to purchase
and own such real estate as may be necessary for the purpose of carrying on
its business. It is also authorized to hold such real estate as it may find
necessary to acquire in the collection of debts due to the said bank or to
its branches; but real estate acquired in the collection of debts shall be
sold by the said bank within three years after the date of its acquisition.
SEC. 40. The bank is hereby authorized to erect bonded warehouses for
depositing therein the goods given to it in pledge, in any provincial
capital or any municipality where the commercial movement or industrial or
agricultural importance of the place may require it.
SEC. 41. The
mortgagor shall have the right, within one year after the sale of real
estate as a result of the foreclosure of a mortgage, to redeem the property
by paying the amount fixed by the court in the order of execution, with
interest thereon at the rate specified in the mortgage, and all the costs
and other judicial expenses incurred by the bank by reason of the execution
and sale and for the custody of said property.
SEC. 42. If, from any
cause whatsoever, any of the securities specified for the loans cited in
sections twelve and fourteen of this Act is damaged and thereby suffers
depreciation in its value, the bank may order such securities to be sold
fifteen days after having called upon the debtor, in writing, to increase
the amount of such security, if in the meantime said debtor has failed to
comply with such request. These sales shall be made, upon ten days public
notice, at public auction, without the requirement of any judicial order or
process, in the presence of a notary public, who shall draw up the proper
record. In order to avoid delay or difficulty in the disposal of such
securities, and that the bank may accomplish the sale without interference
on the part of the debtor, it shall set forth in the note or evidence of
indebtedness that the security given is to be considered as transferred to
the bank without any further formality, under the conditions set forth
therein.
SEC. 43. If the proceeds of the sale of securities held as
collateral for loans by said bank do not cover the full amount of the loan,
together with interest and other charges thereon, the bank may proceed
against the debtor for the difference, but any amount exceeding the full
indebtedness to the bank shall be paid to the debtor.
SEC. 44. The
provisions of Act Numbered Seventeen hundred and fifty-four and its
amendments are hereby made applicable to violations of the law consisting in
the making, or causing to be made, and circulating, or causing to be
circulated, forged notes and bonds in imitation of those of the National
Bank.
SEC. 45. No fee or charge of any kind by way of commission
shall be exacted, demanded or paid, for obtaining loans, and any officer,
employee, or agent of the bank exacting, demanding, or receiving any fee for
service in obtaining a loan or for use of his influence to obtain a loan
shall be punished as hereafter established for violation of this Act.
SEC. 46. After deduction of the administration expenses, the net profits
or gains resulting from the operations of said National Bank shall be
apportioned semiannually as follows:
For the creation and maintenance
of a reserve, a sum-equal to fifty per centum of the net profits. The
remaining fifty per centum shall be distributed among the stockholders in
the form of dividends: Provided, however, That the dividends so to be
distributed shall not exceed in any calendar year twelve per centum of the
paid up capital: And provided further, That in case there is a surplus after
the necessary provision has been made for the reserve and dividend above
mentioned, such surplus shall be transferred to the account of undivided
profits.
SEC. 47. All profits assigned as dividends to the shares de
of the Government shall be paid into the Insular Treasury, for the general
funds thereof, and shall be available for any appropriation.
SEC. 48.
The legal existence of the Philippine National Bank created by this Act
shall be for a period of fifty years, counting from the day on which it
began officially its operations. This period may be extended for fifty years
more by an Act of the Philippine Legislature.
SEC. 49. All banks not
organized and transacting business under a charter granted by the Philippine
Legislature expressly exempting them from the restrictions and penalties of
this section, and all persons or corporations doing the business of bankers,
brokers, or savings institutions, are prohibited from using the word
"national" as a portion of the name or title of such bank, corporation, firm
or partnership ; and any violation of this prohibition committed after
ninety days subsequent to the date of enactment of this Act shall subject
the party chargeable therewith to a penalty of not less than one hundred
pesos for each day during which it is committed or repeated.
SEC. 50.
For a period of six months from and after the enactment of this Act, the
president, with the approval of the board of directors of the National Bank,
may, with the prior approval of the proper head of Department in which such
official or employee is employed, require the services of any official or
employee of the Insular or provincial governments for the purpose of
assisting in the organization of the National Bank: Provided, however,
That the National Bank shall reimburse to the Bureau or Office concerned the
amount of the salary, including the proportionate part of accrued leave, of
such officer or employee: And provided further, That the detail of an
officer or employee as herein contemplated shall in no case be for a period
longer than six months.
SEC. 51. The board of directors of the
National Bank is hereby authorized to adopt the necessary regulations for
its operation, in conformity with this Act and the Corporation Law.
SEC. 52. All Acts or parts of Acts inconsistent or incompatible with the
provisions of this Act are hereby repealed.
SEC. 53. Any person who
shall violate any of the provisions of this Act shall be punished by a fine
not to exceed ten thousand pesos, or by imprisonment not to exceed five
years, or by both such fine and imprisonment.
SEC. 54. This Act shall
take effect on its passage.
Enacted, February 4, 1916.