19046. First National Bank (Philadelphia, PA)

Bank Information

Episode Type
Run → Suspension → Closure
Bank Type
national
Bank ID
1
Charter Number
2731
Start Date
September 18, 1873
Location
Philadelphia, Pennsylvania (39.952, -75.164)

Metadata

Model
gpt-5-mini
Short Digest
c69a4eed

Response Measures

Accommodated withdrawals, Full suspension, Books examined

Other: Bank ultimately failed/closed; government/Treasury later intervened to protect government funds per committee report.

Description

Newspaper accounts from Sept 19–20, 1873 report a run on the First National Bank of Philadelphia (minor), followed by reports of its suspension in the wake of the Jay Cooke & Co. failures and subsequent committee findings of mismanagement and heavy indebtedness. The episode therefore is a run that preceded suspension and ultimate failure/closure.

Events (3)

1. September 18, 1873 Receivership
Newspaper Excerpt
CAUSE OF FAILURE OF THE BANK ... On the 18th of September, and the date of its failure, Jay Cooke were indebted to the bank ... The committee find ... the bank has been ... unfortunate. ... these facts are sufficient evidence ... that these large transfers of moneys were really loans ... Thus were the whole capital of the bank ... used by one firm ... the failure of the bank was dir directly traccable [to this]. (contemporary committee report describing the bank's failure).
Source
newspapers
2. September 19, 1873 Run
Cause
Macro News
Cause Details
General panic and heavy withdrawals triggered by the failure of Jay Cooke & Co. and related New York financial crisis.
Measures
Bank continued to meet demands; president kept bank open late to show ability to meet claims.
Newspaper Excerpt
There was a run on the First National Bank, but it did not amount to much.
Source
newspapers
3. September 20, 1873 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Bank suspended following insolvency exposed by large indebtedness to Jay Cooke & Co., mismanagement, and deficient internal controls; suspension linked to the Cooke failure but motivated by the bank's own bad loans and indebtedness.
Newspaper Excerpt
the suspension of the First National Bank of that city.
Source
newspapers

Newspaper Articles (7)

Article from The New York Herald, September 20, 1873

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THE RUN ON PHILADELPHIA BANKS. PHILADELPHIA, Sept. 19, 1873. The Fidelity Trust Company did not close at three P. M., but continued to meet all demands, receiving checks as late as five o'clock, at which hour over $900,000 had been paid out. Mr. Browne, President, said he would keep open until midnight if it were necessary, to show depositors that that institution was in a sound condition and able to meet all claims. The Union Bauking Company was run upon up to the hour of closing, three o'clock, at which hour about $500,000 had been paid out. There was a run on the First National Bank, but it did not amount to much. TOUCHING BOTTOM. To-night there is a feeling prevailing that the worst has passed and that to-morrow will witness a decided change for the better. PUBLIC FUNDS SAFE. It is authoritatively stated that neither the State nor the city funds are disturbed, the State and city treasurers having no connection whatever with Jay Cooke & Co. nor any of the endangered houses. CALLING ON PRESIDENT GRANT. President Grant is in town to-night and was waited upon by prominent and influential gentlemen, who, it is said, urge the government to do something to strengthen the money market.


Article from New Orleans Republican, September 20, 1873

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WHOLE NUMBER 1981. weather the storm. The president of the physician, was attacked with the dis to-day company asserts that it can pay two dollars for every one of its indebtedness. The Fever in Key West. A Washington dispatch says: Henry D. WASHINGTON, September -The in Cooke says their house will soon resume department has advices from Key W and depositors lose nothing. He also says that the cases of yel'ow fever on the P the suspension of the Washington house nee are improving. No fever at Key W was a matter of expediency, and that time or aboard the Sanguis (Shawmut?). will show them to be in a sound condition. Secretary Richardson. who is advised as to the cause of the suspension of Jay Cooke WASHINGTON. & Co. expressed the opinion that the susCrew of the Polaris. pension will be temporary, and that their assets will be found in excess of their lia S WASHINGTON. September 19.-The bilities. Department has ordered the consul I Excitement at Washington. dee to pay the Polaris crew's expenses, send them home. WASHINGTON, September 9.-Dispatches from all cities report long lines of depositors The Charges Against R. T. Merrick crowding the bank doors. This city is no vestigated. exception. The committee of the bar association There is quite a rush on the Washington the District of Columbia, appointed at City Savings Bank, and a slight demonstrarequest of R. T. Merrick, Esq., to inv tion on the Freedmen's Bank. Both give gate certain charges made against him assurances of their ability to meet all deI Benjamin E. Green, son of General mands. The Freedmen's Savings Bank reGreen, and formerly of this city, made port that they had this morning $80,000, of report to-day. which only $20,000 had been drawn. f The report contains copious extracts There are about seventy-five persons in a the evidence. It sets forth that the char line at this bank. have been shown to be without the sli There is no excitement about the other est foundation, and that Green knew th banks. to be false when he published them, Action of the Authorities at the Capitol. that the committee is forced to this con sion by Green's own testimony, taken Various rumors have been in circulation der oath before the committee. The throughout the day as to the action the troversy arose out of some transact Secretary of the Treasury would take in that took place while Mr. Merrick was order to relieve the financial pressure in ing as counsel for Green in prosecut New York and elsewhere, and telegrams suits to recover property for Green in were sent hence by private parties professdistrict, and of which he had been depri ing to give the programme adopted by during the war. The suit was prosect him. after. it was alleged, a conto success by Mr. Merrick, and since ference with Grant, who was reported for $75,000. to be in Washington. The President was Return of the Juniata. not in Washington, but at 10:30 A. M. General Babcock called at the Treasury The Juniata has returned to St. Jo Department and had a private interview from her search for the Polaris, where with the Secretary. Subsequently numerwill wait for the Tigress and return her. ous inquiries were made of the Secretary, Ten Millions of Bonds. to which he uniformly replied he had not determined what he should do in the premThe Secretary of the Treasury, at a ises, as he saw no reason as yet why he hour to-night, telegraphed the assis should interfere. and at eleven o'clock to treasurer at New York to purchase night. being interrogated on the same sub000,000 of bonds on Saturday. jeet. he remarked that there was no authority for the various statements and rumors concerning his acts or intentions on finanTHE POLARIS. cial subjects. as he had determined on nothing. The Polaris Party at Dundee. During the afternoon and evening he was LONDON, September 19. -The stea in telegraphic correspondence with the Arctic brought to Dundee ten member treasury officers in New York and also the Polaris expedition, whose names are with the President, He said at the latest follows: Buddington, sailing master; interview that if he should to-night detersels, chief of scientific corps; Chester, mine upon any measure he would furnish mate; Morton, second mate; Schun the information to the press. chief engineer; O'Dell, second engin At half-past eleven o'clock the Secretary, Campbell, freman; Simous, Hobby in company with General Babcock and Mr. Hays, seamen. All are in excellent liea Conant, the chief of the loan division, were Three others were transferred by at the telegraph office together. when he Ravenscraig to the whaler Intrepid, W telegraphed to the assistant Treasurer at t is expected at Dundee in two or New York to purchase on Saturday $10,weeks. Their names are: Bryan, astr 000,000 of bonds. This is a special sale in J mer and chaplain; Mauch, seaman; addition to the regular sale next week. Booth, fireman. The Effect in Philadelphia. What They Say. PHILADELPEIA, September -The folThe reseued of the Polaris party re that after separation from Tyson and Iowing have suspended: H. H. Douglass a companions, the Polaris was finally Bayard, J.H. Yerkes, John L. Lloyd, Gildoned in a sinking condition by Cap baugh & Co. all small firms except Gilbaugh. Buddington and the remainder of the.e 1 The feeling here is that the worst is past, dition. The party wintered in Life and that to-morrow will witness a decided Cave, where they built a timber h change for the better. which they covered with sails. The wi It is authoritatively stated that neither passed without event, except the breal u the State nor city funds are disturbed. out of seurvy, which, however, was tended by severe symptoms. Plentiful s Run on the Philidelphia Banks. plies of walrus' liver for food were obta The Fidelity Trust Company did not from the natives, and to this diet is at close at 3P. M. but continued to meet all uted the mildness of the disease. demands. receiving checks as late as five In the spring two boats were built of o'clock. at which hour over $900,000 had boards taken from the cabin of the Pol been paid out. Mr. Brown, the president, In these the whole party embarked as said he would keep open until midnight, if as the ice opened, and sailed soutHw it was necessary, to show depositors that On the third of June they sighted the institution was in sound condition and York, and on the twenty second were pi able to meet all claims. up by the Ravenscraig. The Union Banking Company was run as Mr. Chester, first mate, is regarded upon up to the hour of closing. three one who did most to save the party o'clock, at which hour about $500,000 had the rescued men speak in the highest té been paid out. There something of a of his exertions. They also say that run on the First National also, but it did tain Hall enjoyed the confidence of e not amount to much. one, and his death, which was unexped The Matter is Circinnati was deplored by all on board. CISCINNATI. September News con Dr. Bessel's Statement. eerning the New York failures has been GOTHA, September --Dr. Petermani sought to-day with a great deal of interest, received a private dispatch from Dr. but has produced no excitement. There is Bessel, chief of the scientific corps of a feeling of general security with reference Polaris, announcing the safe arrival to our banks here, and no apprehensions the remainder of the Polaris expeditio are felt concerning our dealers in stocks. Dundee. The dispatch briefly states The transactions in stocks during the last the party experienced great hardships one or two months are said to have been had narrow escapes before they were unusually small. The impression appears cued by the Ravenscraig. general in our financial circles that the reg. ular business interests of the country will How They Were Rescued. not be seriously affected. DUNDEE, Scotland, September 19 crew of the Polaris were making their No Excitement in Sit. Louis. south in boats, made from the ship, ST. LOUIS, September 19.-There was they were seen by the whaler Ravens no excitement here today from the and taken aboard that vessel. They panic in New York Business on all well. 'Change was very quiet, and outside of a Civil War in Morocco. small decline in wheat and bacon, from A civil war has broken out in Mor local causes. nothing unusual is noticeable between a son and brother of the dece In monetary circles and among banks and Sultan, and the trade of the count brokers everything is calm and confident. paralyzed. None of our banks have large balances in New York; what they have are in old corNEW YORK. porated institutions, therefore no fears are entertained of losses. There has actually been no effect here m any department of Board of Steam Navigation. trade other than a slight pause, which will NEW YORK, September 19.-The Nat be too temporary to produce serious results. Board of Steam Navigation elected Ca Dick Woolfolk, of Louisville. vice presi The London House All Right. The board passed resolutions against LOXDON, September 19. -Jay Cooke, Mcrenewal of patents and in favor of the Culloch & Co., of this city, have paid over ernment controlling the Louisville can the counter all day the run on the house. Declines. P.P. firm of Jay Cooke, McCulVice President Wilson declines the loch & Co., of this city, paid cash over dency of the Cuban League. its counter all day. notwithstanding the run on the house. Marine. Arrived New York Angela


Article from Middletown Transcript, September 20, 1873

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The great banking house of Jay Cooko & Co. has suspended. Their liabilities are not yet known. Greatexcitement prevailed in financial circles when the announcement of their inability to meet their payments was made. In New York a financial panic ensued, and operators in gold and stocks became very nervous. The firms of Richard Shell & Co., and Robinson & Suydam suspend. ed, and a dispatch from Philadelphia announced the suspension of E. W. Clark & Co. Then came the news of the closing of the Warbington house of Jay Cooke & Co., and the suspension of the First National Bank of that city. At last reports other failures were looked for.


Article from The Wheeling Daily Register, September 22, 1873

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PHILADELPHIA. The Financial Position. PHILADELPHIA, September 20. .-The Fidelity Trust Company, did not close at three o'clock yesterday afternoon. but continued to meet all demands, re= ceiving ohecks as late as five, at which time over nine hundred thousand had been paid out. Mr. Brown, the President, said be would keep open until midnight if it was necessary to show depositors that that institution was in a sound condition, and able to meet all claims. The Union Banking Company was run upon up to the hour of closing, at which time about five hundred thousand dollars had been paid out. There was a run on the First National Bauk, but it did not amount to much. It is said that neither the State nor the city funds are disturbed, the State and City Treasurers having no connection weatever with Jay Cooke & Co., or any of the endangered houses Thurd street is comparatively quiet this morning. The run on the Fidelity Trust Co, has almost entirely subsided. The Union Banking Company did not open to-day. A placard on the door states that owing to the heavy demand a suspension of a few days had been resolved upon. It sustained a heavy run yesterday, paying out about seven hundred thousand dollars. It is stated that the institution is issuing no notes, and the suspension only affects depositors. At Jay Cooke & Co's the clerks are preparing a statement to be laid before the meeting of the members of the firm on the arrival of the steamship Russia, on board of which are two of the partners.


Article from The Wheeling Daily Intelligencer, September 22, 1873

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ADDITIONAL TELEGR APH. for with great interest and has been freely discussed. No paper has gone to protest, and the banks generally have been caring s for their customers. Though the past few days have been spent in preparing for every possible emergency, the merchants P and monied men of the city almost uniformly believe that Cincinnati will not be seriously affected by the storm which is raging in the East. The Run on Banks at Washington. WASHINGTON, Sep. 30 -The run on the Freedmen's and Washington City Sav. ings Banks continues to-day, but is much leas than yesterday. The former has paid out $65,000. There are about seventy. five persons, the majority being colored, awaiting their turn at the counter, and the actuary says it is about the usual Baturday afternoon crowd. WASHINGTON, Sep. though much interest was to day manifested in the exciting news from New York and Philadelphia, it had no apparent effect on the benking institutions in this city, The run on the Freedmen's and ashington City Savings Banks continued, but not to the extent of yesterday. No Disturbance of Business at Boston Bosron, Bep. 20.-The financial alarm to New York in the principal subject of discussion, but 80 far does not interfere with business. Only Serves to Induce Cantion at Montreal. MONTHEAL, Sept. 20.-The only effect here of the panic in New York has been to make #: bankers more cantious and leas willing to let out their tunds, which are ample for all their legitimate commercial demands. The discount rates vary from 7 to per cent, according to the standing of the names. A Suspension at Toronto. TORONTO, Sept. 20.-H. J. Morse & Co. bankers and brokers in this city, have suspended, owing to the failure of Cooke & Co., and other prominent houses. A Temporary Suspension at Albany. ALBANY, Sept. 20.-T. Squire & Co.' bankers, announce their temporary sus. pension until further orders from New York. Suspension or a Branch of Taussig & Co. in St. Louis. Sr. Louis, Sept. 20 -Taussig, Gemp & Co., this city, closed doors this afternoon, after the failure of their New York house, Tauseig, Fischer & Co. They confldent or being able to resume in a few days, and state that no one will lose a dollar by them. This house dealt pretty ex tensively in railroad securities on their own account. Suspension of a Private Bank in Chicago--No Excitement in Financial or Commercial Circles There. CHICAGO, Sept. 20.-The Franklin Bank, a private banking institution on the corner of Madison and Dearborn streets, closed its doors to-day, being unable to settle at the clearing house. The amount short was only $9,000. Fernando Jones is President of the concern and S. A. Briggs, Vice President. The latter states that their embarrassment is merely temporary and as it is not known to have been in any way connected with any of the suspended New York houses there would appear to be no reason why it should not resume soon. It is stated that a majority of the teachers of the public schools of the city are depositors in the bank. Its early resumption is, therefore, the more to be hoped for. The suspension creates no excitement or feeling whatever in t financial or commercial circles. Matters in Philadelphia Better Feeling in the Evening. PHILADELPHIA, Sept. 20.-The Fidelity Trust Company did not close at 3 o'clock 8 this afternoon, but continued to meet all demands, receiving checks as late as 5 o'clock, at which hour over over $900,000 had been paid out. Mr. Brown, the President, said be would keep open until midnight it it was neccessary, to show the depositors that the institution was in sound condition and able to meet all claims against it. The Union Banking Company was run upon up to the hour of closing, at which time about $500,000 had been paid out. There was a run on the First National Bank, but it did not amount to much. It is authoritatively stated that neither the State nor city funds are disturbed, the State and city Treasuries having no connection with Jay Cooke & Co. or any u of the endangered houses. p PHILADELPHIA, Sept. 20.-Third street is comparatively quiet this morning. The run on the Fidelity Trust Company has almost entirely subsided. The Union Banking Company did not open to-day. tl A placard on the door states that owing to the heavy demands n suspension of alow days had been resolved on. It sustaineda heavy run yesterday, paying out about $700,000. It is a Stateinstitution, issuing no notes, and the suspension only affects the depositors. At Jay Cooke's the clerks are preparing a statement to be laid be fore a meeting of the members of the firm, on the arrival ot the steamship Russis, on board of which are two of the n partners. Priladelphia, Sept. 20 -Evening.Tuo excitement over the failures has abated and matters are beginning to as. sume a right shape, although the stock market was somewhat feverish to day; yet the affairs on the street were more settled, owing, no doubt. to the promise of the Secretary of the Treasury to make use of $44 000,000 of the reserve fund If desired. The failure of the Union Banking Company, of this city, had but little effect on the public mind, as it was a small conoern and its failure cannot possibly affect other institutions. The Fidelity Trust and Safe Company met all its obligations to day. The run was not as heavy as yesterday, only about $400,000 being paid out. Prudential Step Taken by Chicago Savings Banks. CHICAGO, Sept 31 meeting of the officers of the different Savings Banks in this city was held to-day, at which all the Savings Bank institutions in the city


Article from Wilmington Daily Commercial, September 30, 1873

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On Saturday last, the Chester Valley National Bank of Coatesville suspended. It is understood that this movement was influenced mainly through the suspension of the First National Bank of Philadelphia, in which it had considerable deposits. Parties supposed to be acquainted with the situation of the bank, give it as the'r opinion that the suspension will be but of tem porary duration.


Article from National Republican, March 21, 1874

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es NKING AND CURRENCY. HOW THE BANK was MAN AGED-NEGLE OF THE -THE OFFICERS-THE BANK'S INDESTEDNESS TO THE COOKE & CO.'S RELATIONS WITH ITM THE -PROPOSED TO AMENDMENT THE CURRENCY ACT. Mr. J. Macfarland, correspondent f the Phile delphia Press, telegraphed the following to area shop I $ I $ age: paper tiem by the House late the affairs o the First National Bank of this city. Asubof the on Banking and CurMerriam Parwell, Measrs. of remoy, I Darbam, appointed to make the examination. meeting the committee yester. I 1 day 1 Che or and regort sented and adopted, and is understood a reported to the House Momday next. prtscipal stoek- a that report of the holders of at the i I members of the firm of Jay Cooke & Co. During its exist existence the bank has been a. depository blie meneys, and largely employed at the time to faspeial a A : I % 1 of I de 1 I a thirty notes, and in funding various Government I system. with As Government agent its transactions have been of great magnitude, and large profits have boon derived from them and from dealing overament securities or all kinds. Another branch. to and a a I 1 I 1 version of matilated the time of its to the failure persissions currency fund amounted $750,000 of indebtedness to other becks, The commiller and that there was was GREAT AND NEGLECT by the officers of the bank to establish and out proper system for the management of its details. No adequate checks shed to Insure correctness and accuracy. No record is found of any cash settlement having been made in this department of the bank. It did not into the general cash account, but was kept separately. The books of this account were simply wpwerouse At the time of the failure the accumulation of not entered on the general books of the bank amounted to nearly $340,000. This entered and comes in Its proper place in the balance sheet. There difference between the balance sheet prepared by the committee and the statement actually shown by the books on the 18th of September last in this mutilated curr ency account $46,398. A thorough examination shows that this deficit cannot be accounted for. THE LARGE INDESTEDNESS of the bank to the Government exceeding the amount securities deposited has speciall inquired into, and arose as follows: As desig. na nated de depository this bank issued its certif in favor vor the United States rer for fractional currency, to forwarded the banks who made their orders through it. In the natural course of business said certificates would not be large, and the balances in bank would be kept down to proper amount by transfer orders made soon as the reports of the bank when received at the Treasury could be exam ined. August 23, 1873, the balance to the credit of the Treasurer on the books of the bank, and reported to him, was $133,108.45. 45. During the fol. lowing week were issue by the bank and cashed (by the Treasurer amounting to @118 ,750, @118,750, runnin the balance on the 30th August $251,858.45. During the following week certifi cates were issued to amount of $40,524, 534, making a total of $292,382.45. Transfer orders were paid the amount of $145,000, leaving the balance September 6at at 8147 $147,382.45. From the 8th tothe 17th of September, inclusive, certificates were issued to the amount of 400. $185,400. making total of $332,782; and on the 13th of September transfer order was paid for $45, 000, leaving lance on the 13th $287,782.45 or the certific stes issued during the last week $125,000 were for ractional currency to be shipped Jay Cooke & Uo., Phils Hadelphia. At the that these large sums were forwarded on the strength of the certificates of the First National Bank that bank was already indebted to the United States Treasurer for & sum larger than the amount of its securities on deposit with the Treasurer. HOW JAY COOKE AND co. OBTA OBTAINED ED GOVERNMENT AID. The committee find that the manner through which Cooke were permitted to thus obtain from the Government what might be called temporary loan of large amount of money on the simple indo indorsement of the First National bank was due to & laxity in former Treasury regulations, of which they took advanto forbolster in their : attempt failing du tage tunes. Immediately after the failure of the bank the present Secretary of the Treasury took effective steps, through which he has been enabled to obtain full and ampleg narantees and security by which the Gove would be saved red from loss. The committee have examined Ined the charac racter of the guarantee and security, and feel confident that any deficiency will fully met from another source than the assets of the bank. The commit. tee give the Secretary credit -for his promptness in this matter. In speaking of the management and CAUSE OF FAILURE OF THE BANK the committee find that on September 18 there were $83,383.46 of due past-due paper, mostly owed, and $72,838.93 demand notes- notes-making total of $156,222.39. These demand notes dational loans of long standing, which should be been a have for of them Some called past-due. years in one shape or anot another. The bank is carestate # real indebt000'988 emos rying edness, which has also been carried for years. The commit tee further find that during its OXistence sum amounting to over $180,000 has been charged to profit and loss account for bad debts. The statement of these few facts the committee deems sufficient to show that the management rement of the bank has been, to say the least, unfortunate. From the of its business to the present time the bank seems to have paid no attention to the law limiting loans one tenth capital. The provisions of the 29th section of the our rency act has been repeatedly transg transgressed, both letter and spirit, and to this failure of the bank is is dir directly traccable. Technically, it might be said that the large amount due from Jay Cooke Co. was the nature deposit, the facts such an assertion is preposterous. I 00.18 COOKE YYP On the 18th of September, and the date of its failure, Jay Cooke were indebted to the bank in the of sum of $765,960.69 960.69 in current account. They further . debt - indorsers on paper of the Northern Pacific railroad $100,000, and Henry D. Cooks, president bank and mem Indelecad a the the : I Date (on note carried by the bank fn some shape or other since January 1888, of $49,978 42; making total . The Northern Pacific railroad indebtedness edness has carried by the bank since the 17th of July, 1872. From August Ito Septemb 18 the current account of Jay Cooke & Co. was increased from 8238, $238,682 to 8748 $748,980, without security. Nearly $300, 000 of this amount was after September 6240,000 fthat was - the 15th and 10th of September. These facts are sufficient evidence, in view of the events which vents which thereafter, that these large transfers of moneys were really loans made to bolster up and streng then strengthen s firm and were not deposits. difficulties, legitimate lites, Thus were the whole capital of the bank. its whole surplus, and . part of its used by one firm, and that firm composed of the principal I 8 & I terms I 8 above of a 1 parts 2 you = public and private funds intrusted tos national bank for safe-heeping and legitimate uses. The refer to the fact that the Comptroller of the Currency has able to pay 30 per 1 per R 3 I 1 pay Repredent a 1 an divided of and ! ACT. The committee closed by submitting amendto the twenty r-atath and fifty fifty-third third sections of the tonal currency act. The twenty minth section the mittee propose amend to: as follows: That no rganised under this act shall deposit with, loan to in any manner or purchase any obligation of any person, Imp to or = . I peny, For one tenth of its unimpaired capital and sap. greater be smply # collaterals 3 valuable of 5 I or under the perfect control of such salable in the - mari market for an amount at one teath greater than the - secured thereby: Provided, That this shall not applyto of bone Ade bills of values. askally ally I il to made with deposits sociations organized under Titlons of the national currency It is proposed to amend the fifty-third section by imposing penalties for the forfeiture of the charter, and the fine and risonment of I 1 an # I a I I [ 1 collected -