AN ACT TO AMEND IN CERTAIN PARTICULARS
ACT NUMBERED
TWENTY-SIX HUNDRED AND TWELVE, ENTITLED "AN ACT CREATING THE PHILIPPINE
NATIONAL BANK."
Be it enacted by the Senate and House of
Representatives of the Philippines in Legislature assembled and by the
authority of the same:
SECTION 1. In order to explain certain provisions,
increase the stability of the institution, and extend its powers,
Act
Numbered Twenty-six hundred and twelve, entitled "An Act creating the
Philippine National Bank," is hereby amended in certain particulars, so that
hereafter the said Act shall read as follows:
"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 shares 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.
"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 may
be offered to the provincial and municipal governments or to the public at a
price not below par which the board of directors of the bank shall from time
to time determine.
"The voting power of all the stock of the National Bank
owned and controlled by the Government of the Philippine Islands shall be
vested exclusively in a committee consisting of the Governor-General, the
President of the Senate, and the Speaker of the House of Representatives.
"SEC. 5. There are hereby appropriated, out of any
funds in the Insular Treasury not otherwise appropriated, such sums as may
be necessary for the payment of the shares to be purchased by the Government
of the Philippine Islands: Provided, That the capital and surplus of' the
Agricultural Bank of the Philippine Islands shall be applied primarily to
said payment: And provided, further, That no sum shall be set up on the
books of the Auditor until it, shall be necessary to make the payment or
payments authorized by this Act.
"SEC. 6. All the assets and liabilities of the
Government Agricultural Bank of the Philippine Islands, created under Act
Numbered Eighteen hundred and sixty-live, 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 both as to principal and as to interest due
thereon redeemed by the Government and become the property thereof:
Provided, That by agreement between the Insular Treasurer and the National
Bank, the said National Bank may renew any 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 ri6r 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 per cent of its capital and surplus and all amounts
realized from the sale of real estate bonds, as provided in sections twelve
and thirteen herein, on notes secured by real estate mortgages. Payment of
such notes shall be secured by first mortgages on farm lands in the
Philippine Islands, and in no case shall such loans exceed sixty per cent of
the actual value of said land, including the value of the permanent
improvements thereon, such as buildings and machinery if the same form an
integral part of the agricultural development: Provided, however, That
whenever the bank may deem it advisable, 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 improvements. 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 five years or more after the date of its 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. Applications for such loans shall be in writing and
under oath, and 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:
"(A) To purchase or discount 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.
"(B) To make loans on, or to discount notes secured by,
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 : 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.
"(C) 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, corn, maguey, etc., not in excess of
three-fifths of the estimated value of such crops: 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, or personal bonds with sufficient
surety or sureties, satisfactory to the bank.
''(D).To make loans to the several provincial and
municipal governments and to any other branch or subdivision of the
Government of the Philippine Islands on promissory notes guaranteed by the
Central Government, as shown by the endorsement thereon of the Secretary of
Finance, approved by the Governor-General of the Philippine Islands, or to
purchase bonds lawfully issued by such provincial and municipal governments
and any other branch or subdivision of the Government of the Philippine
Islands.
"(E) Generally, to make advances or discount paper for
agricultural, manufacturing, industrial, or commercial purposes: Provided,
That loans, discounts, or advances made under this section shall have
maturities not exceeding one year, renewable from year to year, in the
discretion of the Bank.
"SEC. 12. 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 semiannually 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 holder thereof
except as hereinafter provided.
"SEC. 13. 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 redeemable 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. 14. 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. 15. Said National Bank is hereby authorized to
issue circulating notes. Said notes shall never be issued in any amount
exceeding the paid-up capital stock and surplus of said bank plus the amount
of gold coin of the United States held in the Bank's own vaults or to its
order in the Treasury of the Philippine Islands, or of the United States or
in solvent National Banks of the United States or in any Federal Reserve
Bank.
"The securities described in section eleven, subsection
(A), of this Act, 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
National Bank a sum not less than thirty-three and one-third per cent of the
total amount of said circulating notes issued and outstanding and not
covered by gold coin of the United States as herein provided for in lawful
money of the Philippine Islands.
"Said sum shall be available only for the purpose of
redeeming the circulating notes herein provided for.
"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 circulation
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, and shall be redeemed by the bank on demand, in
lawful money of the Philippine Islands, at the Central Office in Manila.
"SEC. 16. 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 Secretary of Finance, it is in the public interest to make
deposits from public funds in other banks or institutions legally authorized
to receive such deposits he is hereby authorized to cause the same to be
done under such terms and conditions as he may deem proper.
"SEC. 17. 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 Secretary of
Finance or of the Governor-General of the Philippine Islands, any
information in his possession regarding the operations of said Bank.
"SEC. 18. The president and vice-president shall be
appointed by the Governor-General, by and with the consent of the Philippine
Senate, and may be removed for cause by said Governor-General, by and with
the same consent. ' 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. The president may, with the
authorization of the board of directors, delegate from time to time any of
his duties or functions to any officer of the bank.
"SEC. 19. All the other officers and employees of said
National Bank shall be appointed and removed by the president 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:
Provided, further, That whenever the president or vice-president, by order
of the board of directors, shall temporarily or permanently perform duties
incumbent upon other officers or employees, they may be granted compensation
additional to the salary fixed by this Act for the president and
vice-president; but the resolution of said Board shall not take effect until
the written approval of the Governor-General and of the presiding officers
of both Houses of the Philippine Legislature has been secured. The orders of
the said board of directors in this respect may be modified or repealed at
any time, provided they are approved in each case by the Governor-General
and the presiding officers of both Houses of the Legislature.
"SEC. 20. The president of the National Bank shall, "
before 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.
"SEC. 21. All the other officers and employees of said
National Bank or any branch thereof, shall, if and as required by the board
of directors of said bank, before entering 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, and for this purpose alone, all officers and
employees of the National Bank of whom a bond is required 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. 22. The Attorney-General of the Philippine
Islands shall be attorney for said National Bank and may, whenever he may
deem it proper, in specific cases delegate his duties to the fiscal of the
city of Manila or any provincial fiscal, as the case may be: Provided,
however, That the board of directors of said bank shall have power to employ
such additional attorneys as may be necessary.
"SEC. 23. 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 pf the bank and report thereon at least once each year to the
Governor-General of the Philippine Islands, through the Secretary of
Finance, and to the board of directors of said bank. The cost of such
examination and report shall be reimbursed by said bank.
"SEC. 24. The National Bank shall be subject to
inspection by the Insular Treasurer with regard to its solvency in the
manner provided by law.
"SEC. 25. The Secretary of Finance, 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. 26. 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, the Secretary of Finance, 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 jurisdiction.
"SEC. 27. The president of the National Bank shall be
appointed for a term of six years, and shall receive an annual salary of
twenty-four thousand pesos. The vice-president shall hold office for a like
term as the president and shall receive a 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. 28. 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. 29. The board of directors created by section
seventeen 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 the said National
Bank shall require definite security in written form to protect each and
every loan, discount, or other advance of funds made by it. The board of
directors shall make and publish semiannually a general balance of the
business of said bank.
"SEC. 30. The said National Bank, by this Act created,
may establish branches or agencies in the United States of America and in
other countries 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 said National Bank.
"SEC. 31. The National Bank may establish branch banks
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 nineteen 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 Secretary of the
Interior 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. 32. 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. 33. 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. 34. Nothing contained in this Act 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. 35. 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.
"SEC. 36. 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 five years after the date of its
acquisition.
"SEC. 37. 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. 38. 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. 39. If, from any cause whatsoever, any of the
securities specified for the loans provided for in this Act or accepted by
said bank as security for loans or discount decline or depreciate in market
value in part or as a whole, or on nonperformance of any promise made to
secure the loan or discount, or upon nonpayment of any liability under a
loan or discount, or upon bills of exchange, notes, and checks, the said
bank may demand additional securities or may forthwith declare any such
obligation due and payable and upon twenty-four hours' notice, if
practicable, or without such notice, if otherwise demand, sell, assign,
transfer, and deliver the whole of said securities or any part thereof, or
any substitutes therefor, or any additions thereto, or any other securities
or property given unto or left in the possession of, or thereafter given
unto or left in the possession of the said bank for safekeeping or
otherwise, at any brokers' board or at public or private sale, at the option
of said bank, without either demand, advertisement, or notice of any kind,
and at such sale, if public, the said bank may itself purchase the whole or
any part of the property sold, free from any right of redemption on the part
of the mortgagor or pledger. In case of sale for any cause, after deducting
all costs or expenses of any kind for collection, sale or delivery, the said
bank may apply the residue of the proceeds of the sale so made, to pay one
or more or any or all of the said liabilities to the said bank, as its
President shall deem proper, whether then due or not due, making proper
rebate for interest on liabilities not then due, returning the over plus, if
any, to the mortgagor or pledger who shall remain liable to and pay to said
Bank for any deficiency arising upon such sale or sales.
"SEC. 40. 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. 41. 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. 42. 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. 43. 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. 44. All profits assigned as dividends to the
shares of the Government shall be paid into the Insular Treasury, for the
general funds thereof.
"SEC. 45. 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 46. 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. 47. 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. 48. All Acts or parts of Acts inconsistent or
incompatible with the provisions of this Act are hereby repealed.
''SEC. 49. 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. 50. The Philippine National Bank shall at all
times keep on hand in its vaults or with the Treasury of the Philippine
Islands a sum in lawful money either of the Philippine Islands or of the
United States which shall be computed as follows:
"Thirty-three and one-third per cent of the
circulating-notes outstanding not covered by gold coin as provided in
section eighteen of Act Numbered Twenty-six hundred and twelve, as amended
by this Act.
"Twenty-five per cent of the demand deposits
outstanding and credited on its books, except such funds as are on deposit
with solvent banks in the United States and collate rated by securities
approved by the Insular Treasurer, or in solvent banks approved by the
Insular Treasurer; ten per cent of the certificates of fixed deposit
maturing within one year from the date upon which the computation is made,
or sixty-six and two-thirds per cent of those maturing within thirty days
from such date : Provided, That if the Philippine National Bank shall have
funds subject to check with National Banks or Federal Reserve Banks of the
United States, such funds may be considered as constituting a part of the
twenty-five per cent and ten per cent specified in this section up to a sum
to be fixed from time to time by the Secretary of Finance, with the approval
of the Governor-General.
"SEC. 51. The Philippine National Bank is hereby
authorized to guarantee, both as to
principal and interest, or either,
bonds issued by duly incorporated companies for the erection of and addition
or additions to industrial plants or manufactories principally used for the
manufacture and preparation of the products of the Philippine Islands:
Provided, however, That such guarantee shall only be lawful when approved by
a committee composed of the Governor-General of the Philippine Islands and
the Presiding Officers of the two Houses of the Philippine Legislature.
"Subject to the same approval, the National Bank is
hereby authorized to purchase bonds issued by any duly incorporated company
engaged in the manufacture or preparation of products of the Philippine
Islands. Such bonds shall be secured by a first mortgage or deed of trust on
the property of the company. The face value of the bonds issued and secured
by such mortgage or deed of trust shall not exceed sixty per cent (60%) of
the fair value of the property securing the bonds. The property serving as
security for the bonds shall consist of land, buildings, machinery, and
equipment of such company in the Philippine Islands."
SEC. 2. This Act shall take effect on its approval.
Approved, February 20, 1918.