1. Amount
of Shares; Increase and Decrease of Capital; Surrender and Cancellation
of Stock The capital stock of each Federal
reserve bank shall be divided into shares of $100 each. The outstanding
capital stock shall be increased from time to time as member banks
increase their capital stock and surplus or as additional banks become
members, and may be decreased as member banks reduce their capital
stock or surplus or cease to be members. Shares of the capital stock
of Federal reserve banks owned by member banks shall not be transferred
or hypothecated. When a member bank increases its capital stock or
surplus, it shall thereupon subscribe for an additional amount of
capital stock of the Federal reserve bank of its district equal to
6 per centum of the said increase, one-half of said subscription to
be paid in the manner hereinbefore provided for original subscription,
and one-half subject to call of the Board of Governors of the Federal
Reserve System. A bank applying for stock in a Federal reserve bank
at any time after the organization thereof must subscribe for an amount
of the capital stock of the Federal reserve bank equal to 6 per centum
of the paid-up capital stock and surplus of said applicant bank, paying
therefor its par value plus one-half of 1 per centum a month from
the period of the last dividend. When a member bank reduces its capital
stock or surplus it shall surrender a proportionate amount of its
holdings in the capital stock of said Federal Reserve bank. Any member
bank which holds capital stock of a Federal Reserve bank in excess
of the amount required on the basis of 6 per centum of its paid-up
capital stock and surplus shall surrender such excess stock. When
a member bank voluntarily liquidates it shall surrender all of its
holdings of the capital stock of said Federal Reserve bank and be
released from its stock subscription not previously called. In any
such case the shares surrendered shall be canceled and the member
bank shall receive in payment therefor, under regulations to be prescribed
by the Board of Governors of the Federal Reserve System, a sum equal
to its cash-paid subscriptions on the shares surrendered and one-half
of 1 per centum a month from the period of the last dividend, not
to exceed the book value thereof, less any liability of such member
bank to the Federal Reserve bank.
[12 USC 287. As amended
by act of Aug. 23, 1935 (49 Stat. 713).]
