the american economy a historical encyclopedia phần 9 ppt

Government engages, at the earliest possible moment after
the receipt of such demand, to cause any of the books,
records, or documents so specified, which shall be in their
possession or power (or authenticated copies or extracts of
the same), to be transmitted to the said Secretary of State,
who shall immediately deliver them over to the said board of
commissioners; provided that no such application shall be
made by or at the instance of any claimant, until the facts
which it is expected to prove by such books, records, or doc-
uments, shall have been stated under oath or affirmation.
ARTICLE XVI
Each of the contracting parties reserves to itself the entire
right to fortify whatever point within its territory it may
judge proper so to fortify for its security.
ARTICLE XVII
The treaty of amity, commerce, and navigation, concluded
at the city of Mexico, on the fifth day of April,
A.D. 1831,
between the United States of America and the United
Mexican States, except the additional article, and except so far
as the stipulations of the said treaty may be incompatible
with any stipulation contained in the present treaty, is hereby
revived for the period of eight years from the day of the
exchange of ratifications of this treaty, with the same force
and virtue as if incorporated therein; it being understood that
each of the contracting parties reserves to itself the right, at
any time after the said period of eight years shall have
expired, to terminate the same by giving one year’s notice of
such intention to the other party.
ARTICLE XVIII
All supplies whatever for troops of the United States in

Mexico, arriving at ports in the occupation of such troops
previous to the final evacuation thereof, although subse-
quently to the restoration of the custom-houses at such ports,
shall be entirely exempt from duties and charges of any kind;
the Government of the United States hereby engaging and
pledging its faith to establish and vigilantly to enforce, all pos-
sible guards for securing the revenue of Mexico, by prevent-
ing the importation, under cover of this stipulation, of any
articles other than such, both in kind and in quantity, as shall
really be wanted for the use and consumption of the forces of
the United States during the time they may remain in Mexico.
To this end it shall be the duty of all officers and agents of the
United States to denounce to the Mexican authorities at the
respective ports any attempts at a fraudulent abuse of this
stipulation, which they may know of, or may have reason to
suspect, and to give to such authorities all the aid in their
power with regard thereto; and every such attempt, when
duly proved and established by sentence of a competent tri-
bunal, They shall be punished by the confiscation of the
property so attempted to be fraudulently introduced.
ARTICLE XIX
With respect to all merchandise, effects, and property
whatsoever, imported into ports of Mexico, whilst in the
occupation of the forces of the United States, whether by cit-
izens of either republic, or by citizens or subjects of any neu-
tral nation, the following rules shall be observed:
(1) All such merchandise, effects, and property, if im-
ported previously to the restoration of the custom-houses to
the Mexican authorities, as stipulated for in the third article
of this treaty, shall be exempt from confiscation, although the

importation of the same be prohibited by the Mexican tariff.
(2) The same perfect exemption shall be enjoyed by all
such merchandise, effects, and property, imported subse-
quently to the restoration of the custom-houses, and previ-
ously to the sixty days fixed in the following article for the
coming into force of the Mexican tariff at such ports respec-
tively; the said merchandise, effects, and property being,
however, at the time of their importation, subject to the pay-
ment of duties, as provided for in the said following article.
(3) All merchandise, effects, and property described in the
two rules foregoing shall, during their continuance at the
place of importation, and upon their leaving such place for
the interior, be exempt from all duty, tax, or imposts of every
kind, under whatsoever title or denomination. Nor shall they
be there subject to any charge whatsoever upon the sale
thereof.
(4) All merchandise, effects, and property, described in the
first and second rules, which shall have been removed to any
place in the interior, whilst such place was in the occupation
of the forces of the United States, shall, during their continu-
ance therein, be exempt from all tax upon the sale or con-
sumption thereof, and from every kind of impost or
contribution, under whatsoever title or denomination.
(5) But if any merchandise, effects, or property, described
in the first and second rules, shall be removed to any place
not occupied at the time by the forces of the United States,
they shall, upon their introduction into such place, or upon
their sale or consumption there, be subject to the same duties
which, under the Mexican laws, they would be required to
pay in such cases if they had been imported in time of peace,

through the maritime custom-houses, and had there paid the
duties conformably with the Mexican tariff.
(6) The owners of all merchandise, effects, or property,
described in the first and second rules, and existing in any
port of Mexico, shall have the right to reship the same,
exempt from all tax, impost, or contribution whatever.
With respect to the metals, or other property, exported
from any Mexican port whilst in the occupation of the forces
of the United States, and previously to the restoration of the
custom-house at such port, no person shall be required by
the Mexican authorities, whether general or state, to pay any
tax, duty, or contribution upon any such exportation, or in
any manner to account for the same to the said authorities.
ARTICLE XX
Through consideration for the interests of commerce gen-
erally, it is agreed, that if less than sixty days should elapse
between the date of the signature of this treaty and the
restoration of the custom houses, conformably with the stip-
ulation in the third article, in such case all merchandise,
effects and property whatsoever, arriving at the Mexican
ports after the restoration of the said custom-houses, and
previously to the expiration of sixty days after the day of sig-
nature of this treaty, shall be admitted to entry; and no other
558 Treaty of Guadalupe Hidalgo
duties shall be levied thereon than the duties established by
the tariff found in force at such custom-houses at the time of
the restoration of the same. And to all such merchandise,
effects, and property, the rules established by the preceding
article shall apply.
ARTICLE XXI

If unhappily any disagreement should hereafter arise
between the Governments of the two republics, whether with
respect to the interpretation of any stipulation in this treaty,
or with respect to any other particular concerning the politi-
cal or commercial relations of the two nations, the said
Governments, in the name of those nations, do promise to
each other that they will endeavour, in the most sincere and
earnest manner, to settle the differences so arising, and to
preserve the state of peace and friendship in which the two
countries are now placing themselves, using, for this end,
mutual representations and pacific negotiations. And if, by
these means, they should not be enabled to come to an
agreement, a resort shall not, on this account, be had to
reprisals, aggression, or hostility of any kind, by the one
republic against the other, until the Government of that
which deems itself aggrieved shall have maturely considered,
in the spirit of peace and good neighbourship, whether it
would not be better that such difference should be settled by
the arbitration of commissioners appointed on each side, or
by that of a friendly nation. And should such course be pro-
posed by either party, it shall be acceded to by the other,
unless deemed by it altogether incompatible with the nature
of the difference, or the circumstances of the case.
ARTICLE XXII
If (which is not to be expected, and which God forbid) war
should unhappily break out between the two republics, they
do now, with a view to such calamity, solemnly pledge them-
selves to each other and to the world to observe the following
rules; absolutely where the nature of the subject permits, and
as closely as possible in all cases where such absolute obser-

vance shall be impossible:
(1) The merchants of either republic then residing in the
other shall be allowed to remain twelve months (for those
dwelling in the interior), and six months (for those dwelling
at the seaports) to collect their debts and settle their affairs;
during which periods they shall enjoy the same protection,
and be on the same footing, in all respects, as the citizens or
subjects of the most friendly nations; and, at the expiration
thereof, or at any time before, they shall have full liberty to
depart, carrying off all their effects without molestation or
hindrance, conforming therein to the same laws which the
citizens or subjects of the most friendly nations are required
to conform to. Upon the entrance of the armies of either
nation into the territories of the other, women and children,
ecclesiastics, scholars of every faculty, cultivators of the earth,
merchants, artisans, manufacturers, and fishermen, unarmed
and inhabiting unfortified towns, villages, or places, and in
general all persons whose occupations are for the common
subsistence and benefit of mankind, shall be allowed to con-
tinue their respective employments, unmolested in their per-
sons. Nor shall their houses or goods be burnt or otherwise
destroyed, nor their cattle taken, nor their fields wasted, by
the armed force into whose power, by the events of war, they
may happen to fall; but if the necessity arise to take anything
from them for the use of such armed force, the same shall be
paid for at an equitable price. All churches, hospitals, schools,
colleges, libraries, and other establishments for charitable and
beneficent purposes, shall be respected, and all persons con-
nected with the same protected in the discharge of their
duties, and the pursuit of their vocations.

(2) In order that the fate of prisoners of war may be alle-
viated all such practices as those of sending them into distant,
inclement or unwholesome districts, or crowding them into
close and noxious places, shall be studiously avoided. They
shall not be confined in dungeons, prison ships, or prisons;
nor be put in irons, or bound or otherwise restrained in the
use of their limbs. The officers shall enjoy liberty on their
paroles, within convenient districts, and have comfortable
quarters; and the common soldiers shall be disposed in can-
tonments, open and extensive enough for air and exercise and
lodged in barracks as roomy and good as are provided by the
party in whose power they are for its own troops. But if any
officer shall break his parole by leaving the district so
assigned him, or any other prisoner shall escape from the
limits of his cantonment after they shall have been designated
to him, such individual, officer, or other prisoner, shall forfeit
so much of the benefit of this article as provides for his liber-
ty on parole or in cantonment. And if any officer so breaking
his parole or any common soldier so escaping from the lim-
its assigned him, shall afterwards be found in arms previous-
ly to his being regularly exchanged, the person so offending
shall be dealt with according to the established laws of war.
The officers shall be daily furnished, by the party in whose
power they are, with as many rations, and of the same arti-
cles, as are allowed either in kind or by commutation, to offi-
cers of equal rank in its own army; and all others shall be
daily furnished with such ration as is allowed to a common
soldier in its own service; the value of all which supplies shall,
at the close of the war, or at periods to be agreed upon
between the respective commanders, be paid by the other

party, on a mutual adjustment of accounts for the subsistence
of prisoners; and such accounts shall not be mingled with or
set off against any others, nor the balance due on them with-
held, as a compensation or reprisal for any cause whatever,
real or pretended. Each party shall be allowed to keep a com-
missary of prisoners, appointed by itself, with every canton-
ment of prisoners, in possession of the other; which
commissary shall see the prisoners as often as he pleases; shall
be allowed to receive, exempt from all duties and taxes, and to
distribute, whatever comforts may be sent to them by their
friends; and shall be free to transmit his reports in open let-
ters to the party by whom he is employed.
And it is declared that neither the pretense that war dis-
solves all treaties, nor any other whatever, shall be considered
as annulling or suspending the solemn covenant contained in
this article. On the contrary, the state of war is precisely that
for which it is provided; and, during which, its stipulations
are to be as sacredly observed as the most acknowledged obli-
gations under the law of nature or nations.
Treaty of Guadalupe Hidalgo 559
ARTICLE XXIII
This treaty shall be ratified by the President of the United
States of America, by and with the advice and consent of the
Senate thereof; and by the President of the Mexican Republic,
with the previous approbation of its general Congress; and
the ratifications shall be exchanged in the City of
Washington, or at the seat of Government of Mexico, in four
months from the date of the signature hereof, or sooner if
practicable.
In faith whereof we, the respective Plenipotentiaries, have

signed this treaty of peace, friendship, limits, and settlement,
and have hereunto affixed our seals respectively. Done in
quintuplicate, at the city of Guadalupe Hidalgo, on the sec-
ond day of February, in the year of our Lord one thousand
eight hundred and forty-eight.
N. P. TRIST
LUIS P. CUEVAS
BERNARDO COUTO
MIGL. ATRISTAIN
***
Article IX was modified and Article X was stricken by the U.S.
Congress. The following are the original articles. An
explanation or agreement of why the articles were stricken,
known as the protocol of Querétaro, is also included below.
***
ARTICLE IX
The Mexicans who, in the territories aforesaid, shall not
preserve the character of citizens of the Mexican Republic,
conformably with what is stipulated in the preceding Article,
shall be incorporated into the Union of the United States, and
admitted as soon as possible, according to the principles of
the Federal Constitution, to the enjoyment of all the rights of
citizens of the United States. In the mean time, they shall be
maintained and protected in the enjoyment of their liberty,
their property, and the civil rights now vested in them
according to the Mexican laws. With respect to political
rights, their condition shall be on an equality with that of the
inhabitants of the other territories of the United States; and
at least equally good as that of the inhabitants of Louisiana
and the Floridas, when these provinces, by transfer from the

French Republic and the Crown of Spain, became territories
of the United States.
The same most ample guaranty shall be enjoyed by all
ecclesiastics and religious corporations or communities, as
well in the discharge of the offices of their ministry, as in the
enjoyment of their property of every kind, whether individ-
ual or corporate. This guaranty shall embrace all temples,
houses and edifices dedicated to the Roman Catholic wor-
ship; as well as all property destined to its support, or to that
of schools, hospitals and other foundations for charitable or
beneficent purposes. No property of this nature shall be con-
sidered as having become the property of the American
Government, or as subject to be, by it, disposed of or divert-
ed to other uses.
Finally, the relations and communication between the
Catholics living in the territories aforesaid, and their respec-
tive ecclesiastical authorities, shall be open, free and exempt
from all hindrance whatever, even although such authorities
should reside within the limits of the Mexican Republic, as
defined by this treaty; and this freedom shall continue, so
long as a new demarcation of ecclesiastical districts shall not
have been made, conformably with the laws of the Roman
Catholic Church.
ARTICLE X
All grants of land made by the Mexican government or by
the competent authorities, in territories previously apper-
taining to Mexico, and remaining for the future within the
limits of the United States, shall be respected as valid, to the
same extent that the same grants would be valid, to the said
territories had remained within the limits of Mexico. But the

grantees of lands in Texas, put in possession thereof, who, by
reason of the circumstances of the country since the begin-
ning of the troubles between Texas and the Mexican
Government, may have been prevented from fulfilling all the
conditions of their grants, shall be under the obligation to
fulfill the said conditions within the periods limited in the
same respectively; such periods to be now counted from the
date of the exchange of ratifications of this Treaty: in default
of which the said grants shall not be obligatory upon the
State of Texas, in virtue of the stipulations contained in this
Article.
The foregoing stipulation in regard to grantees of land in
Te xas, is extended to all grantees of land in the territories
aforesaid, elsewhere than in Texas, put in possession under
such grants; and, in default of the fulfillment of the condi-
tions of any such grant, within the new period, which, as is
above stipulated, begins with the day of the exchange of rati-
fications of this treaty, the same shall be null and void.
THE PROTOCOL OF QUERÉTARO
In the city of Queretaro on the twenty sixth of the month
of May eighteen hundred and forty-eight at a conference
between Their Excellencies Nathan Clifford and Ambrose H.
Sevier Commissioners of the United States of America, with
full powers from their Government to make to the Mexican
Republic suitable explanations in regard to the amendments
which the Senate and Government of the said United States
have made in the treaty of peace, friendship, limits and defin-
itive settlement between the two Republics, signed in
Guadalupe Hidalgo, on the second day of February of the
present year, and His Excellency Don Luis de la Rosa,

Minister of Foreign Affairs of the Republic of Mexico, it was
agreed, after adequate conversation respecting the changes
alluded to, to record in the present protocol the following
explanations which Their aforesaid Excellencies the
Commissioners gave in the name of their Government and in
fulfillment of the Commission conferred upon them near the
Mexican Republic.
First.
The American Government by suppressing the IXth arti-
cle of the Treaty of Guadalupe and substituting the III article
560 Treaty of Guadalupe Hidalgo
of the Treaty of Louisiana did not intend to diminish in any
way what was agreed upon by the aforesaid article IXth in
favor of the inhabitants of the territories ceded by Mexico. Its
understanding that all of that agreement is contained in the
IIId article of the Treaty of Louisiana. In consequence, all the
privileges and guarantees, civil, political and religious, which
would have been possessed by the inhabitants of the ceded
territories, if the IXth article of the Treaty had been retained,
will be enjoyed by them without any difference under the
article which has been substituted.
Second.
The American Government, by suppressing the Xth article
of the Treaty of Guadalupe did not in any way intend to
annul the grants of lands made by Mexico in the ceded terri-
tories. These grants, notwithstanding the suppression of the
article of the Treaty, preserve the legal value which they may
possess; and the grantees may cause their legitimate titles to
be acknowledged before the American tribunals.
Conformably to the law of the United States, legitimate

titles to every description of property personal and real, exist-
ing in the ceded territories, are those which were legitimate
titles under the Mexican law in California and New Mexico
up to the I3th of May 1846, and in Texas up to the 2d March
1836.
Third.
The Government of the United States by suppressing the
concluding paragraph of article XIIth of the Treaty, did not
intend to deprive the Mexican Republic of the free and unre-
strained faculty of ceding, conveying or transferring at any
time (as it may judge best, the sum of the twelve millions of
dollars which the same Government of the United States is to
deliver in the places designated by the amended article.
And these explanations having been accepted by the
Minister of Foreign Affairs of the Mexican Republic, he
declared in name of his Government that with the under-
standing conveyed by them, the same Government would
proceed to ratify the Treaty of Guadalupe as modified by the
Senate and Government of the United States. In testimony of
which their Excellencies the aforesaid Commissioners and
the Minister have signed and sealed in quintuplicate the pres-
ent protocol.
[Seal] A. H. Sevier
[Seal] Nathan Clifford
[Seal] Luis de la Rosa
Treaty of Guadalupe Hidalgo 561
Gadsden Purchase Treaty
(1853)
In 1853, just five years after the signing of the Treaty of
Guadalupe Hidalgo, the United States negotiated the purchase

of a narrow strip of land in the Mesilla Valley of northern
Mexico. The Gadsden Purchase, named after U.S. negotiator
James Gadsden, covered approximately 30,000 square miles.
Mexico received $10 million in compensation from the United
States. Used for the southern route of the railroad to the
Pacific, this land currently is located in the southern portions
of Arizona and New Mexico.
Source: />mexico/mx1853.htm.
BY THE PRESIDENT OF THE UNITED STATES OF
AMERICA
A PROCLAMATION.
WHEREAS a treaty between the United States of America
and the Mexican Republic was concluded and signed at the
City of Mexico on the thirtieth day of December, one thou-
sand eight hundred and fifty-three; which treaty, as amended
by the Senate of the United States, and being in the English
and Spanish languages, is word for word as follows:
IN THE NAME OF ALMIGHTY GOD:
The Republic of Mexico and the United States of America
desiring to remove every cause of disagreement which might
interfere in any manner with the better friendship and inter-
course between the two countries, and especially in respect to
the true limits which should be established, when, notwith-
standing what was covenanted in the treaty of Guadalupe
Hidalgo in the year 1848, opposite interpretations have been
urged, which might give occasion to questions of serious
moment: to avoid these, and to strengthen and more firmly
maintain the peace which happily prevails between the two
republics, the President of the United States has, for this pur-
pose, appointed James Gadsden, Envoy Extraordinary and

Minister Plenipotentiary of the same, near the Mexican gov-
ernment, and the President of Mexico has appointed as
Plenipotentiary “ad hoc” his excellency Don Manuel Diez de
Bonilla, cavalier grand cross of the national and distinguished
order of Guadalupe, and Secretary of State, and of the office
of Foreign Relations, and Don Jose Salazar Ylarregui and
General Mariano Monterde as scientific commissioners,
invested with full powers for this negotiation, who, having
communicated their respective full powers, and finding them
in due and proper form, have agreed upon the articles fol-
lowing:
ARTICLE I.
The Mexican Republic agrees to designate the following as
her true limits with the United States for the future: retaining
the same dividing line between the two Californias as already
defined and established, according to the 5th article of the
treaty of Guadalupe Hidalgo, the limits between the two
republics shall be as follows: Beginning in the Gulf of Mexico,
three leagues from land, opposite the mouth of the Rio
Grande, as provided in the 5th article of the treaty of
Guadalupe Hidalgo; thence, as defined in the said article, up
the middle of that river to the point where the parallel of 31°
47’ north latitude crosses the same; thence due west one hun-
dred miles; thence south to the parallel of 31° 20’ north lati-
tude; thence along the said parallel of 31° 20’ to the 111th
meridian of longitude west of Greenwich; thence in a straight
line to a point on the Colorado River twenty English miles
below the junction of the Gila and Colorado rivers; thence up
the middle of the said river Colorado until it intersects the
present line between the United States and Mexico.

For the performance of this portion of the treaty, each of
the two governments shall nominate one commissioner, to
the end that, by common consent the two thus nominated,
having met in the city of Paso del Norte, three months after
the exchange of the ratifications of this treaty, may proceed to
survey and mark out upon the land the dividing line stipu-
lated by this article, where it shall not have already been sur-
veyed and established by the mixed commission, according to
the treaty of Guadalupe, keeping a journal and making
proper plans of their operations. For this purpose, if they
should judge it necessary, the contracting parties shall be at
562
liberty each to unite to its respective commissioner, scientific
or other assistants, such as astronomers and surveyors, whose
concurrence shall not be considered necessary for the settle-
ment and of a true line of division between the two
Republics; that line shall be alone established upon which the
commissioners may fix, their consent in this particular being
considered decisive and an integral part of this treaty, with-
out necessity of ulterior ratification or approval, and without
room for interpretation of any kind by either of the parties
contracting.
The dividing line thus established shall, in all time, be
faithfully respected by the two governments, without any
variation therein, unless of the express and free consent of the
two, given in conformity to the principles of the law of
nations, and in accordance with the constitution of each
country respectively.
In consequence, the stipulation in the 5th article of the
treaty of Guadalupe upon the boundary line therein

described is no longer of any force, wherein it may conflict
with that here established, the said line being considered
annulled and abolished wherever it may not coincide with
the present, and in the same manner remaining in full force
where in accordance with the same.
ARTICLE II.
The government of Mexico hereby releases the United
States from all liability on account of the obligations con-
tained in the eleventh article of the treaty of Guadalupe
Hidalgo; and the said article and the thirty-third article of the
treaty of amity, commerce, and navigation between the
United States of America and the United Mexican States con-
cluded at Mexico, on the fifth day of April, 1831, are hereby
abrogated.
ARTICLE III.
In consideration of the foregoing stipulations, the
Government of the United States agrees to pay to the govern-
ment of Mexico, in the city of New York, the sum of ten mil-
lions of dollars, of which seven millions shall be paid
immediately upon the exchange of the ratifications of this
treaty, and the remaining three millions as soon as the
boundary line shall be surveyed, marked, and established.
ARTICLE IV.
The provisions of the 6th and 7th articles of the treaty of
Guadalupe Hidalgo having been rendered nugatory, for the
most part, by the cession of territory granted in the first arti-
cle of this treaty, the said articles are hereby abrogated and
annulled, and the provisions as herein expressed substituted
therefor. The vessels, and citizens of the United States shall, in
all time, have free and uninterrupted passage through the

Gulf of California, to and from their possessions situated
north of the boundary line of the two countries. It being
understood that this passage is to be by navigating the Gulf of
California and the river Colorado, and not by land, without
the express consent of the Mexican government; and pre-
cisely the same provisions, stipulations, and restrictions, in all
respects, are hereby agreed upon and adopted, and shall be
scrupulously observed and enforced by the two contracting
governments in reference to the Rio Colorado, so far and for
such distance as the middle of that river is made their com-
mon boundary line by the first article of this treaty.
The several provisions, stipulations, and restrictions con-
tained in the 7th article of the treaty of Guadalupe Hidalgo
shall remain in force only so far as regards the Rio Bravo del
Forte, below the initial of the said boundary provided in the
first article of this treaty; that is to say, below the intersection
of the 31° 47’ parallel of latitude, with the boundary line
established by the late treaty dividing said river from its
mouth upwards, according to the fifth article of the treaty of
Guadalupe.
ARTICLE V.
All the provisions of the eighth and ninth, sixteenth and
seventeenth articles of the treaty of Guadalupe Hidalgo, shall
apply to the territory ceded by the Mexican Republic in the
first article of the present treaty, and to all the rights of per-
sons and property, both civil and ecclesiastical, within the
same, as fully and as effectually as if the said articles were
herein again recited and set forth.
ARTICLE VI.
No grants of land within the territory ceded by the first

article of this treaty bearing date subsequent to the day—
twenty-fifth of September—when the minister and sub-
scriber to this treaty on the part of the United States,
proposed to the Government of Mexico to terminate the
question of boundary, will be considered valid or be recog-
nized by the United States, or will any grants made previously
be respected or be considered as obligatory which have not
been located and duly recorded in the archives of Mexico.
ARTICLE VII.
Should there at any future period (which God forbid)
occur any disagreement between the two nations which
might lead to a rupture of their relations and reciprocal
peace, they bind themselves in like manner to procure by
every possible method the adjustment of every difference;
and should they still in this manner not succeed, never will
they proceed to a declaration of war, without having previ-
ously paid attention to what has been set forth in article
twenty-one of the treaty of Guadalupe for similar cases;
which article, as well as the twenty-second is here reaffirmed.
ARTICLE VIII.
The Mexican Government having on the 5th of February,
1853, authorized the early construction of a plank and rail-
road across the Isthmus of Tehuantepec, and, to secure the
stable benefits of said transit way to the persons and mer-
chandise of the citizens of Mexico and the United States, it is
stipulated that neither government will interpose any obsta-
cle to the transit of persons and merchandise of both nations;
and at no time shall higher charges be made on the transit of
persons and property of citizens of the United States, than
may be made on the persons and property of other foreign

nations, nor shall any interest in said transit way, nor in the
proceeds thereof, be transferred to any foreign government.
The United States, by its agents, shall have the right to
Gadsden Purchase Treaty 563
transport across the isthmus, in closed bags, the mails of the
United States not intended for distribution along the line of
communication; also the effects of the United States govern-
ment and its citizens, which may be intended for transit, and
not for distribution on the isthmus, free of custom-house or
other charges by the Mexican government. Neither passports
nor letters of security will be required of persons crossing the
isthmus and not remaining in the country.
When the construction of the railroad shall be completed,
the Mexican government agrees to open a port of entry in
addition to the port of Vera Cruz, at or near the terminus of
said road on the Gulf of Mexico.
The two governments will enter into arrangements for the
prompt transit of troops and munitions of the United States,
which that government may have occasion to send from one
part of its territory to another, lying on opposite sides of the
continent.
The Mexican government having agreed to protect with its
whole power the prosecution, preservation, and security of
the work, the United States may extend its protection as it
shall judge wise to it when it may feel sanctioned and war-
ranted by the public or international law.
ARTICLE IX.
This treaty shall be ratified, and the respective ratifications
shall be exchanged at the city of Washington within the exact
period of six months from the date of its signature, or sooner,

if possible.
In testimony whereof, we, the plenipotentiaries of the con-
tracting parties, have hereunto affixed our hands and seals at
Mexico, the thirtieth (30th) day of December, in the year of
our Lord one thousand eight hundred and fifty-three, in the
thirty-third year of the independence of the Mexican repub-
lic, and the seventy-eighth of that of the United States.
JAMES GADSDEN,
MANUEL DIEZ DE BONILLA
JOSE SALAZAR YLARBEGUI
J. MARIANO MONTERDE,
And whereas the said treaty, as amended, has been duly
ratified on both parts, and the respective ratifications of the
same have this day been exchanged at Washington, by
WILLIAM L. MARCY, Secretary of State of the United States,
and SENOR GENERAL DON JUAN N. ALMONTE, Envoy
Extraordinary and Minister Plenipotentiary of the Mexican
Republic, on the part of their respective Governments:
Now, therefore, be it known that I, FRANKLIN PIERCE,
President of the United States of America, have caused the
said treaty to be made public, to the end that the same, and
every clause and article thereof, may be observed and fulfilled
with good faith by the United States and the citizens thereof.
In witness whereof I have hereunto set my hand and
caused the seal of the United States to be affixed.
Done at the city of Washington, this thirtieth day of June,
in the year of our Lord one thousand eight hundred and fifty-
four, and of the Independence of the United States the seventy-
eighth.
BY THE PRESIDENT:

FRANKLIN PIERCE,
W. L. MARCY, Secretary of State.
564 Gadsden Purchase Treaty
Signed into law by the Northern Republican Congress during
the Civil War, the Homestead Act allowed individuals to
acquire 160 acres of public land for a nominal filing fee after
five years of residency or for $1.25 per acre after just six
months of residency. Between 1862 and 1986, more than 25
percent of all public lands were disposed of under this act. The
total number of acres amounted to 287,500,000. Home-
steaders, enticed by the opportunity to receive free land, helped
settle the West.
Source: Congressional Globe online, 37th Congress, 2nd
session, pp. 352–353, .
An act to Secure Homesteads to actual Settlers on the
Public Domain.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That any
person who is the head of a family, or who has arrived at the
age of twenty-one years, and is a citizen of the United States,
or who shall have filed his declaration of intention to become
such, as required by the naturalization laws of the United
States, and who has never borne arms against the United
States Government or given aid and comfort to its enemies,
shall, from and after the first of January, eighteen hundred and
sixty-three, be entitled to enter one quarter section or a less
quantity of unappropriated public lands, upon which said
person may have filed a preemption claim, or which may, at
the time the application is made, be subject to preemption at
one dollar and twenty-five cents, or less, per acre; or eighty

acres or less of such unappropriated lands, at two dollars and
fifty cents per acre, to be located in a body, in conformity to
the legal subdivisions of the public lands, and after the same
shall have been surveyed: Provided, That any person owning
and residing on land may, under the provisions of this act,
enter other land lying contiguous to his or her said land,
which shall not, with the land so already owned and occupied,
exceed in the aggregate, one hundred and sixty acres.
Section 2. And be it further enacted, That the person
applying for the benefit of this act shall, upon application to
the register of the land office in which he or she is about to
make such entry, make affidavit before the said register or
receiver that he or she is the head of a family, or is twenty-one
years or more of age, or shall have performed service in the
army or navy of the United States, and that he has never
borne arms against the Government of the United States or
given aid and comfort to its enemies, and that such applica-
tion is made for his or her exclusive use and benefit, and that
said entry is made for the purpose of actual settlement and
cultivation, and not either directly or indirectly for the use or
benefit of any other person or persons whomsoever; and
upon filing the said affidavit with the register or receiver, and
on payment of ten dollars, he or she shall thereupon be per-
mitted to enter the quantity of land specified: Provided, how-
ever, That no certificate shall be given or patent issued
therefor until the expiration of five years from the date of
such entry; and if, at the expiration of such time, or at any
time within two years thereafter, the person making such
entry; or, if he be dead, his widow; or in case of her death, his
heirs or devisee; or in the case of a widow making such entry,

her heirs or devisee, in the case of her death; shall prove by
two credible witnesses that he, she, or they have resided upon
or cultivated the same for the term of five years immediately
succeeding the time of filing the affidavit aforesaid, and shall
make affidavit that no part of said land has been alienated,
and he has borne true allegiance to the Government of the
United States; then, in such case, he, she, or they, if at that
time a citizen of the United States, shall be entitled to a
patent, as in other cases provided for by law: And, provided,
further, That in case of the death of both father and mother,
leaving an infant child, or children, under twenty-one years
of age, the right and fee shall enure to the benefit of said
infant child or children; and the executor, administrator, or
guardian may, at any time within two years after the death of
the surviving parent, and in accordance with the laws of the
State in which such children for the time being have their
domicil, sell said land for the benefit of said infants, but for
no other purpose; and the purchaser shall acquire the
absolute title by the purchase, and be entitled to a patent from
the United States, on payment of the office fees and sum of
money herein specified.
Homestead Act
(1862)
565
Section 3. And be it further enacted, That the register of
the land office shall note all such applications on the tract
books and plats of his office, and keep a register of all such
entries, and make return thereof to the General Land Office,
together with the proof upon which they have been founded.
Section 4. And be it further enacted, That no lands

acquired under the provisions of this act shall in any event
become liable to the satisfaction of any debt or debts con-
tracted prior to the issuing of the patent therefor.
Section 5. And be it further enacted, That if, at any time
after the filing of the affidavit, as required in the second sec-
tion of this act, and before the expiration of the five years
aforesaid, it shall be proven, after due notice to the settler, to
the satisfaction of the register of the land office, that the per-
son having filed such affidavit shall have actually changed his
or her residence, or abandoned the said land for more than
six months at any time, then and in that event the land so
entered shall revert to the government.
Section 6. And be it further enacted, That no individual
shall be permitted to acquire title to more than one quarter
section under the provisions of this act; and that the
Commissioner of the General Land Office is hereby required
to prepare and issue such rules and regulations, consistent
with this act, as shall be necessary and proper to carry its pro-
visions into effect; and that the registers and receivers of the
several land offices shall be entitled to receive the same com-
pensation for any lands entered under the provisions of this
act that they are now entitled to receive when the same quan-
tity of land is entered with money, one half to be paid by the
person making the application at the time of so doing, and
the other half on the issue of the certificate by the person to
whom it may be issued; but this shall not be construed to
enlarge the maximum of compensation now prescribed by
law for any register or receiver: Provided, That nothing con-
tained in this act shall be so construed as to impair or inter-
fere in any manner whatever with existing preemption rights:

And provided, further, That all persons who may have filed
their applications for a preemption right prior to the passage
of this act, shall be entitled to all privileges of this act:
Provided, further, That no person who has served or may
hereafter serve, for period of not less than fourteen days in
the army or navy of the United States, either regular or vol-
unteer, under the laws thereof, during the existence of an
actual war, domestic or foreign, shall be deprived of the ben-
efits of this act of account of not having attained the age of
twenty-one years.
Section 7. And be it further enacted, That the fifth section
of the act entitled “An act in addition to an act more effectu-
ally to provide for the punishment of certain crimes against
the United States, and for other purposes,” approved the third
of March, in the year eighteen hundred and fifty-seven, shall
extend to all oaths, affirmations, and affidavits, required or
authorized by this act.
Section 8. And be it further enacted, That nothing in this
act shall be so construed as to prevent any person who has
availed him or herself of the benefits of the first section of this
act, from paying the minimum price, or the price to which
the same may have graduated, for the quantity of land so
entered at any time before the expiration of the five years, and
obtaining a patent therefor from the government, as in other
cases provided by law, on making proof of settlement and
cultivation as provided by existing laws granting preemption
rights.
Approved, May 20, 1862.
566 Homestead Act
On January 1, 1863, President Abraham Lincoln declared that

all slaves in areas of open rebellion were free. Although the
Emancipation Proclamation did not have any immediate
effect on the status of slaves in the Confederacy, after the Civil
War the United States abolished slavery with the ratification of
the Thirteenth Amendment to the Constitution. The end of
slavery had a dramatic impact on the economic structure of
the South. Individuals lost a large portion of their wealth as
slaves received their freedom with no compensation to the
prior owners. Consequently, the primary asset of the Southern
whites remained the land, which they rented out to former
slaves who became tenant farmers.
Source: />By the President of the United States of America:
AProclamation.
Whereas, on the twenty-second day of September, in the
year of our Lord one thousand eight hundred and sixty-two,
a proclamation was issued by the President of the United
States, containing, among other things, the following, to wit:
“That on the first day of January, in the year of our Lord
one thousand eight hundred and sixty-three, all persons held
as slaves within any State or designated part of a State, the
people whereof shall then be in rebellion against the United
States, shall be then, thenceforward, and forever free; and the
Executive Government of the United States, including the
military and naval authority thereof, will recognize and
maintain the freedom of such persons, and will do no act or
acts to repress such persons, or any of them, in any efforts
they may make for their actual freedom.
“That the Executive will, on the first day of January afore-
said, by proclamation, designate the States and parts of States,
if any, in which the people thereof, respectively, shall then be

in rebellion against the United States; and the fact that any
State, or the people thereof, shall on that day be, in good faith,
represented in the Congress of the United States by members
chosen thereto at elections wherein a majority of the quali-
fied voters of such State shall have participated, shall, in the
absence of strong countervailing testimony, be deemed con-
clusive evidence that such State, and the people thereof, are
not then in rebellion against the United States.”
Now, therefore I, Abraham Lincoln, President of the United
States, by virtue of the power in me vested as Commander-in-
Chief, of the Army and Navy of the United States in time of
actual armed rebellion against the authority and government
of the United States, and as a fit and necessary war measure for
suppressing said rebellion, do, on this first day of January, in
the year of our Lord one thousand eight hundred and sixty-
three, and in accordance with my purpose so to do publicly
proclaimed for the full period of one hundred days, from the
day first above mentioned, order and designate as the States
and parts of States wherein the people thereof respectively, are
this day in rebellion against the United States, the following, to
wit: Arkansas, Texas, Louisiana, (except the Parishes of St.
Bernard, Plaquemines, Jefferson, St. John, St. Charles, St.
James Ascension, Assumption, Terrebonne, Lafourche, St.
Mary, St. Martin, and Orleans, including the City of New
Orleans) Mississippi, Alabama, Florida, Georgia, South
Carolina, North Carolina, and Virginia, (except the forty-eight
counties designated as West Virginia, and also the counties of
Berkley, Accomac, Northampton, Elizabeth City, York,
Princess Ann, and Norfolk, including the cities of Norfolk and
Portsmouth), and which excepted parts, are for the present,

left precisely as if this proclamation were not issued.
And by virtue of the power, and for the purpose afore-
said, I do order and declare that all persons held as slaves
within said designated States, and parts of States, are, and
henceforward shall be free; and that the Executive govern-
ment of the United States, including the military and naval
authorities thereof, will recognize and maintain the free-
dom of said persons.
And I hereby enjoin upon the people so declared to be free
to abstain from all violence, unless in necessary self-defence;
and I recommend to them that, in all cases when allowed,
they labor faithfully for reasonable wages.
And I further declare and make known, that such persons
of suitable condition, will be received into the armed service
of the United States to garrison forts, positions, stations, and
other places, and to man vessels of all sorts in said service.
Emancipation Proclamation
(1863)
567
And upon this act, sincerely believed to be an act of justice,
warranted by the Constitution, upon military necessity, I
invoke the considerate judgment of mankind, and the gra-
cious favor of Almighty God.
In witness whereof, I have hereunto set my hand and
caused the seal of the United States to be affixed.
Done at the City of Washington, this first day of January,
in the year of our Lord one thousand eight hundred and sixty
three, and of the Independence of the United States of
America the eighty-seventh.
By the President: ABRAHAM LINCOLN

WILLIAM H. SEWARD, Secretary of State.
568 Emancipation Proclamation
Although the Homestead Act encouraged Americans to settle
in certain parts of the West, Congress also recognized the
need to encourage growth of timber on the prairies. Under
the Timber Culture Act, settlers could claim an additional
160 acres of public land in the region for a small fee if they
planted one-quarter of the land in trees. This policy not only
enticed settlers onto the Great Plains, which would become
the breadbasket of the United States, but also prevented soil
erosion.
Source: Public Statutes at Large, Vol. 17, p. 602.
An Act to encourage the Growth of Timber on western
Prairies.
Be it enacted by the Senate and the House of Represen-
tatives of the United States of America in Congress assem-
bled, That any person who shall plant, protect, and keep in a
healthy, growing condition for ten years forty acres of timber,
the trees thereon not being more than twelve feet apart each
way on any quarter-section of any of the public lands of the
United States shall be entitled to a patent for the whole of said
quarter-section at the expiration of said ten years, on making
proof of such fact by not less than two credible witnesses;
Provided, That only one quarter in any section shall be thus
granted.
Section 2. That the person applying for the benefit of this
act shall, upon application to the register of the land-office in
which he or she is about to make such entry, make affidavit
before said register or receiver that said entry is made for the
cultivation of timber, and upon filing said affidavit with said

register and receiver, and on payment of ten dollars, he or she
shall thereupon be permitted to enter the quantity of land
specified: Provided however, That no certificate shall be given
at patent issue therefor until after the expiration of at least ten
years from the date of such entry; and if at the expiration of
such time, or at any time within three years thereafter, the
person making such entry, or if he or she be dead, his or her
heirs or legal representatives, shall prove by two credible wit-
nesses that he, she, or they have planted, and not for less than
ten years have cultivated and protected such quantity and
character of timber as aforesaid, they shall receive the patent
for such quarter-section of land.
Section 3. That if at any time after the filing of said affi-
davit, and prior to the issuing of the patent for said land, it
shall be proven after due notice to the party making such
entry and claiming to cultivate such timber, to the satisfac-
tion of the register of the land-office that such person has
abandoned or failed to cultivate, protect and keep in good
condition such timber, then, and in that event, said land shall
revert to the United States.
Section 4. That each and every person who, under the pro-
visions of an act entitled “An act to secure homesteads to
actual settlers on the public domain” approved May twenti-
eth, eighteen hundred and sixty-two, or any amendment
thereto, having a homestead on said public domain, who at
the end of the third year of his or her residence thereon, shall
have had under cultivation, for two years, one acre of timber,
the trees thereon not being more than twelve feet apart each
way, and in a good, thrifty condition, for each and every six-
teen acres of said homestead, shall upon due proof of said

fact by two credible witnesses receive his or her patent for said
homestead.
Section 5. That no land acquired under provisions of this
act shall, in any event, become liable to the satisfaction of
any debt or debts contracted prior to the issuing of patent
therefor.
Section 6. That the commissioner of the general land-
office is hereby required to prepare and issue such rules and
regulations, consistent with this act, as shall be necessary and
proper to carry its provisions into effect; and the registers and
the receivers of the several land-offices shall be entitled to
receive the same compensation for any lands entered under
the provisions of this that they are now entitled to receive
when the quantity of land is entered without money.
Section 7. That the fifth section of the act entitled “An act
in addition to an act to punish crimes against the United
States, and for other purposes” approved March third, eight-
een hundred and fifty-seven, shall extend to all oaths, affir-
mations, and affidavits required or authorized by this act.
Approved, March 3, 1873.
Timber Culture Act
(1873)
569
Timber and Stone Culture
Act (1878)
Like the Homestead and Timber Culture Acts, the Timber and
Stone Culture Act allowed Americans settlers to obtain another
160 acres of public land. Under this piece of legislation the
land could be purchased for $1.25 per acre. Only land located
in the far western states could be obtained in this manner.

Since much of the land remained unfit for cultivation, the
government offered it for sale at a reduced rate.
Source: Public Statutes at Large, Vol. 20, pp. 89–91.
An act for the sale of timber lands in the States of
California, Oregon, Nevada, and in Washington Territory.
Be it enacted by the Senate and House of Representatives
of the United States of America in Congress assembled, That
surveyed public lands of the United States within the States of
California, Oregon and Nevada and in Washington Territory,
not included within military, Indian, or other reservations of
the United States, valuable chiefly for timber, but unfit for
cultivation, and which have not been offered at public sale
according to law, may be sold to citizens of the United States,
or persons who have declared their intention to become such,
in quantities not exceeding one hundred and sixty acres to
any one person or associations of persons, at the minimum
price of two dollars and fifty cents per acre; and lands valu-
able chiefly for stone may be sold on the same terms as tim-
ber lands: Provided, That nothing herein contained shall
defeat or impair any bona-fide claim under any law of the
United States, or authorize the sale of any mining claim, or
the improvements of any bona-fide settler, or lands contain-
ing gold, silver, cinnabar, copper, or coal, or lands selected by
said States under any law of the United States donating lands
for internal improvements, education, or other purposes:
And provided further, That none of the rights conferred by
the act approved July twenty-six, eighteen hundred and sixty-
six, entitled “An act granting the right of way to ditch and
canal owners over the public lands, and for other purposes,”
shall be abrogated by this act; and all patents granted shall be

subject to any vested and accrued water rights, or rights to
ditches and reservoirs used in connection with such water
rights, as may have been acquired under and by the provi-
sions of said act; and such rights shall be expressly reserved in
any patent issued under this act.
Sec. 2. That any person desiring to avail himself of the pro-
visions of this act shall file with the register of the proper dis-
trict a written statement in duplicate, one of which is to be
transmitted to the General Land Office, designating by legal
subdivisions the particular tract of land he desires to pur-
chase, setting forth that the same is unfit for cultivation, and
valuable chiefly for its timber or stone; that it is uninhabited;
contains no mining or other improvements, except for ditch
or canal purposes, where any such do exist, save such as were
made by or belong to the applicant, nor, as deponent verily
believes, any valuable deposit of gold, silver, cinnabar, copper,
or coal; that deponent had made no other application under
this act; that he does not apply to purchase the same on spec-
ulation, but in good faith to appropriate it to his own exclu-
sive use and benefit; and that he has not, directly or indirectly,
made any agreement or contract, in any way or manner, with
any person or persons whatsoever, by which the title which he
may acquire from the government of the United States
should inure, in whole or in part, to the benefit of any person
except himself; which statement must be verified by the oath
of the applicant before the register or the receiver of the land-
office within the district where the land is situated; and if any
person taking such oath shall swear falsely in the premises, he
shall be subject to all the pains and penalties of perjury, and
shall forfeit the money which he may have paid for said lands,

and all right and title to the same; and any grant or con-
veyance which he may have made, except in the hands of the
bona-fide purchasers, shall be null and void.
Sec. 3. That upon the filing of said statement, as provided
in the second section of this act, the register of the land office,
shall post a notice of such application embracing a descrip-
tion of the land by legal subdivisions, in his office, for a pe-
riod of sixty days, and shall furnish the applicant a copy of
the same for publication, at the expense of such applicant, in
a newspaper published nearest the location of the premises,
for a like period of time; and after the expiration of said sixty
days, if no adverse claim shall have been filed, the person
desiring to purchase shall furnish to the register of the land-
570
office satisfactory evidence, first, that said notice of the appli-
cation prepared by the register as aforesaid was duly pub-
lished in a newspaper as herein required; secondly, that the
land is of the character contemplated in this act, unoccupied
and without improvements, other than those excepted, either
mining or agricultural, and that it apparently contains no
valuable deposits of gold, silver, cinnabar, copper, or coal; and
upon payment to the proper officer of the purchase money of
said land, together with the fees of the register and the re-
ceiver, as provided for in case of mining claims in the twelfth
section of the act approved May tenth, eighteen hundred and
seventy-two, the applicant may be permitted to enter said
tract, and, on the transmission to the General Land Office of
the papers and testimony in the case, a patent shall issue
thereon: Provided, That any person having a valid claim to
any portion of the land may object, in writing, to the issuance

of a patent to lands so held by him, stating the nature of his
claim thereto; and evidence shall be taken, and the merits of
said objection shall be determined by the officers of the land-
office, subject to appeal, as in other land cases. Effect shall be
given to the foregoing provisions of this act by regulations to
be prescribed by the Commissioner of the General Land
Office.
Sec. 4. That after the passage of this act it shall be unlaw-
ful to cut, or cause or procure to be cut, or wantonly destroy,
any timber growing on any lands of the United States, in said
States and Territory or remove, or cause to be removed, any
timber from said public lands, with intent to export or dis-
pose of the same; and no owner, director, or agent of any rail-
road, shall knowingly transport the same, or any lumber
manufactured therefrom; and any person violating the provi-
sions of this section shall be guilty of a misdemeanor, and, on
conviction, shall be fined for every such offense a sum not less
than one hundred nor more than one thousand dollar:
Provided, That nothing herein contained shall prevent any
miner or agriculturist from clearing his land in the ordinary
working of his mining claim, or preparing his farm for tillage,
or from taking the timber necessary to support his improve-
ments, or the taking of the timber for the use of the United
States; and the penalties herein provided shall not take effect
until ninety days after the passage of this act.
Sec. 5. That any person prosecuted in said States and
Te rritory for violating section two thousand four hundred
and sixty-one of the Revised Statutes of the United States
who is not prosecuted for cutting timber for export from the
United States, may be relieved from further prosecution and

liability therefor upon payment, into the court wherein such
action is pending, of the sum of two dollars and fifty cents per
acre for all lands on which he shall have cut or caused to be
cut timber, or removed or caused to be removed the same:
Provided, That nothing contained in this section shall be
construed as granting to the person hereby relieved the title
to said lands for said payment; but he shall have the right to
purchase the same upon the same terms and conditions as
other persons, as provided hereinbefore in this act: And fur-
ther provided, that all moneys collected under this act shall
be covered into the Treasury of the United States. And section
four thousand seven hundred and fifty-one of the Revised
Statutes is hereby repealed, so far as it relates to the States and
Te rritory herein named.
Sec 6. That all acts and parts of this act inconsistent with
the provisions of this act are hereby repealed.
Approved, June 3, 1878.
Timber and Stone Culture Act 571
Sherman Anti-Trust Act
(1890)
Initially passed to prevent big business from forming
monopolies, the Sherman Anti-Trust Act resulted in a
case against the sugar company E. C. Knight and
Company. Although the sugar producer controlled 98
percent of the market, the Supreme Court ruled that a
monopoly did not exist. However, the act was used
successfully against the American Railway Union during
the 1894 Pullman strike, when all railroad employees
went out on strike. Congress would eventually pass the
Clayton Anti-Trust Act, which would be used to bust up

the trusts.
Source: Public Statutes at Large, Vol. 26, pp. 209–210.
An act to protect trade and commerce against unlawful
restraints and monopolies.
Be it enacted by the Senate and the House of Representa-
tives of the United States of America in Congress assembled,
Sec. 1. Every contract, combination in the form and trust
or otherwise, or conspiracy, in restraint of trade or commerce
among the United States, or with foreign nations, is hereby
declared to be illegal. Every person who shall make any such
contract or engage in any such combination or conspiracy,
shall be deemed guilty of a misdemeanor, and, on conviction
thereof, shall be punished by fine not exceeding five thousand
dollars, or by imprisonment not exceeding one year, or by
both said punishments, in the discretion of the court.
Sec. 2. Every person who shall monopolize, or attempt to
monopolize, or combine or conspire with any other person
or persons, to monopolize any part of the trade or commerce
among the several States, or with foreign nations, shall be
deemed guilty of a misdemeanor, and, on conviction thereof,
shall be punished by fine not exceeding five thousand dollars,
or by imprisonment not exceeding one year, or both said
punishments, in the discretion of the court.
Sec. 3. Every contract, combination in form of trust or
otherwise, or conspiracy, in restraint of trade or commerce in
any Territory of the United States or of the District of
Columbia, or in restraint of trade and commerce between
any such Territory and another, or between any such Terri-
tory or Territories and any State or States or the District of
Columbia, or with foreign nations, or between the District of

Columbia and any State or States or foreign nations, is hereby
declared illegal. Every person who shall make any such con-
tract or engage in any such combination or conspiracy, shall
be deemed guilty of a misdemeanor, and, on conviction
thereof, shall be punished by fine not exceeding five thousand
dollars, or by imprisonment not exceeding one year, or by
both said punishments, in the discretion of the court.
Sec. 4. The several circuit courts of the United States are
hereby invested with jurisdiction to prevent and restrain vio-
lations of this act; and it shall be the duty of the several dis-
trict attorneys of the United States, in their respective
districts, under the direction of the Attorney General, to
institute proceedings in equity to prevent and restrain such
violations. Such proceedings may be by way of petition set-
ting forth the case and praying that such violation shall be
enjoined or otherwise prohibited. When the parties com-
plained of shall have been duly notified of such petition the
court shall proceed, as soon as may be, to the hearing and
determination of the case; and pending such petition and
before final decree, the court may at any time make such tem-
porary restraining order or prohibition as shall be deemed
just in the premises.
Sec. 5. Whenever it shall appear to the court before which
any proceeding under section four of this act may be pend-
ing, that the ends of justice require that the other parties
should be brought before the court, the court may cause
them to be summoned, whether they reside in the district in
which the court is held or not; and subpoenas to that end
may be served in any district by the marshal thereof.
Sec. 6. Any property owned under any contract or by any

combination, or pursuant to any conspiracy (and being the
subject thereof) mentioned in section one of this act, and
being in the course of transportation from one State to
another, or to a foreign country, shall be forfeited to the
United States, and may be seized and condemned by like pro-
ceedings as those provided by law for the forfeiture, seizure,
and condemnation of property imported into the United
States contrary to law.
572
Sec. 7. Any person who shall be injured in his business or
property by any other person or corporation by reason of
anything forbidden or declared to be unlawful by this act,
may sue therefor in any circuit court of the United States in
the district in which the defendant resides or is found, with-
out respect to the amount in controversy, and shall recover
three fold the damages by him sustained, and the costs of suit,
including a reasonable attorney’s fee.
Sec. 8. That the word “person,” or “persons,”wherever used
in this act shall be deemed to include corporations and asso-
ciations existing under or authorized by the laws of either the
United States, the laws of any of the Territories, or the laws of
any State, or the laws of any foreign country.
Approved, July 2, 1890.
Sherman Anti-Trust Act 573
Panama Canal Treaty
of 1903
The construction of the Panama Canal opened up trade
between the Pacific and the Atlantic Oceans for the
United States as well as the rest of the world. Although
previous to the building of the canal ships could

circumvent South America to reach the other ocean, the
canal reduced the amount of time and cost of shipping
goods. The United States controlled a 10-mile wide strip
of land along the 40-mile canal until 1978 when the canal
was ceded back to the country of Panama effective on
December 31, 1999.
Source: />htm.
Concluded November 18, 1903; ratification advised by the
Senate February 23, 1904; ratified by President February 25,
1904; ratifications exchanged February 26, 1904; proclaimed
February 26, 1904. (U.S. Stats., vol. 33.)
The United States of America and the Republic of Panama
being desirous to insure the construction of a ship canal
across the Isthmus of Panama to connect the Atlantic and
Pacific oceans, and the Congress of the United States of
America having passed an act approved June 28, 1902, in fur-
therance of that object, by which the President of the United
States is authorized to acquire within a reasonable time the
control of the necessary territory of the Republic of
Colombia, and the sovereignty of such territory being actually
vested in the Republic of Panama, the high contracting parties
have resolved for that purpose to conclude a convention and
have accordingly appointed as their plenipotentiaries,
The President of the United States of America, John Hay,
Secretary of State, and
The Government of the Republic of Panama, Philippe
Bunau-Varilla, Envoy Extraordinary and Minister Plenipo-
tentiary of the Republic of Panama, thereunto specially
empowered by said government, who after communicating
with each other their respective full powers, found to be in

good and due form, have agreed upon and concluded the fol-
lowing articles:
ARTICLE I
The United States guarantees and will maintain the inde-
pendence of the Republic of Panama.
ARTICLE II
The Republic of Panama grants to the United States in
perpetuity the use, occupation and control of a zone of land
and land under water for the construction maintenance,
operation, sanitation and protection of said Canal of the
width of ten miles extending to the distance of five miles on
each side of the center line of the route of the Canal to be
constructed; the said zone beginning in the Caribbean Sea
three marine miles from mean low water mark and extend-
ing to and across the Isthmus of Panama into the Pacific
ocean to a distance of three marine miles from mean low
water mark with the proviso that the cities of Panama and
Colon and the harbors adjacent to said cities, which are
included within the boundaries of the zone above described,
shall not be included within this grant. The Republic of
Panama further grants to the United States in perpetuity the
use, occupation and control of any other lands and waters
outside of the zone above described which may be necessary
and convenient for the construction, maintenance, opera-
tion, sanitation and protection of the said Canal or of any
auxiliary canals or other works necessary and convenient for
the construction, maintenance, operation, sanitation and
protection of the said enterprise.
The Republic of Panama further grants in like manner to
the United States in perpetuity all islands within the limits of

the zone above described and in addition thereto the group
of small islands in the Bay of Panama, named, Perico, Naos,
Culebra and Flamenco.
ARTICLE III
The Republic of Panama grants to the United States all the
rights, power and authority within the zone mentioned and
described in Article II of this agreement and within the lim-
its of all auxiliary lands and waters mentioned and described
in said Article II which the United States would possess and
574
exercise if it were the sovereign of the territory within which
said lands and waters are located to the entire exclusion of the
exercise by the Republic of Panama of any such sovereign
rights, power or authority.
ARTICLE IV
As rights subsidiary to the above grants the Republic of
Panama grants in perpetuity to the United States the right to
use the rivers, streams, lakes and other bodies of water within
its limits for navigation, the supply of water or water-power
or other purposes, so far as the use of said rivers, streams,
lakes and bodies of water and the waters thereof may be nec-
essary and convenient for the construction, maintenance,
operation, sanitation and protection of the said Canal.
ARTICLE V
The Republic of Panama grants to the United States in
perpetuity a monopoly for the construction, maintenance
and operation of any system of communication by means of
canal or railroad across its territory between the Caribbean
Sea and the Pacific Ocean.
ARTICLE VI

The grants herein contained shall in no manner invali-
date the titles or rights of private land holders or owners of
private property in the said zone or in or to any of the lands
or waters granted to the United States by the provisions of
any Article of this treaty, nor shall they interfere with the
rights of way over the public roads passing through the said
zone or over any of the said lands or waters unless said
rights of way or private rights shall conflict with rights
herein granted to the United States in which case the rights
of the United States shall be superior. All damages caused to
the owners of private lands or private property of any kind
by reason of the grants contained in this treaty or by reason
of the operations of the United States, its agents or employ-
ees, or by reason of the construction, maintenance, opera-
tion, sanitation and protection of the said Canal or of the
works of sanitation and protection herein provided for,
shall be appraised and settled by a joint Commission
appointed by the Governments of the United States and the
Republic of Panama, whose decisions as to such damages
shall be final and whose awards as to such damages shall be
paid solely by the United States. No part of the work on said
Canal or the Panama railroad or on any auxiliary works
relating thereto and authorized by the terms of this treaty
shall be prevented, delayed or impeded by or pending such
proceedings to ascertain such damages. The appraisal of
said private lands and private property and the assessment
of damages to them shall be based upon their value before
the date of this convention.
ARTICLE VII
The Republic of Panama grants to the United States with-

in the limits of the cities of Panama and Colon and their adja-
cent harbors and within the territory adjacent thereto the
right to acquire by purchase or by the exercise of the right of
eminent domain, any lands, buildings, water rights or other
properties necessary and convenient for the construction,
maintenance, operation and protection of the Canal and of
any works of sanitation, such as the collection and disposi-
tion of sewage and the distribution of water in the said cities
of Panama and Colon, which in the discretion of the United
States may be necessary and convenient for the construction,
maintenance, operation, sanitation and protection of the said
Canal and railroad. All such works of sanitation, collection
and disposition of sewage and distribution of water in the
cities of Panama and Colon shall be made at the expense of
the United States, and the Government of the United States,
its agents or nominees shall be authorized to impose and col-
lect water rates and sewerage rates which shall be sufficient to
provide for the payment of interest and the amortization of
the principal of the cost of said works within a period of fifty
years and upon the expiration of said term of fifty years the
system of sewers and water works shall revert to and become
the properties of the cities of Panama and Colon respectively,
and the use of the water shall be free to the inhabitants of
Panama and Colon, except to the extent that water rates may
be necessary for the operation and maintenance of said sys-
tem of sewers and water.
The Republic of Panama agrees that the cities of Panama
and Colon shall comply in perpetuity with the sanitary ordi-
nances whether of a preventive or curative character pre-
scribed by the United States and in case the Government of

Panama is unable or fails in its duty to enforce this compli-
ance by the cities of Panama and Colon with the sanitary
ordinances of the United States the Republic of Panama
grants to the United States the right and authority to enforce
the same.
The same right and authority are granted to the United
States for the maintenance of public order in the cities of
Panama and Colon and the territories and harbors adjacent
thereto in case the Republic of Panama should not be, in the
judgment of the United States, able to maintain such order.
ARTICLE VIII
The Republic of Panama grants to the United States all
rights which it now has or hereafter may acquire to be prop-
erty of the New Panama Canal Company and the Panama
Railroad Company as a result of the transfer of sovereignty
from the Republic of Colombia to the Republic of Panama
over the Isthmus of Panama and authorizes the New Panama
Canal Company to sell and transfer to the United States its
rights, privileges, properties and concessions as well as the
Panama Railroad and all the shares or part of the shares of
that company; the public lands situated outside of the
zone described in Article II of this treaty now included in
the concessions to both said enterprises and not required in
the construction or operation of the Canal shall revert to the
Republic of Panama except any property now owned by or in
the possession of said companies within Panama or Colon or
the ports or terminals thereof.
Panama Canal Treaty of 1903 575
ARTICLE IX
The United States agrees that the ports at either entrance

of the Canal and the waters thereof, and the Republic of
Panama agrees that the towns of Panama and Colon shall be
free for all time so that there shall not be imposed or collected
custom house tolls, tonnage, anchorage, lighthouse, wharf,
pilot, or quarantine dues or any other charges or taxes of any
kind upon any vessel using or passing through the Canal or
belonging to or employed by the United States, directly or
indirectly, in connection with the construction, maintenance,
operation, sanitation and protection of the main Canal, or
auxiliary works, or upon the cargo, officers, crew, or passen-
gers of any such vessels, except such tolls and charges as may
be imposed by the United States for the use of the Canal and
other works, and except tolls and charges imposed by the
Republic of Panama upon merchandise destined to be intro-
duced for the consumption of the rest of the Republic of
Panama, and upon vessels touching at the ports of Colon and
Panama and which do not cross the Canal.
The Government of the Republic of Panama shall have the
right to establish in such ports and in the towns of Panama
and Colon such houses and guards as it may deem necessary
to collect duties on importations destined to other portions
of Panama and to prevent contraband trade. The United
States Shall have the right to make use of the towns and har-
bors of Panama and Colon as places of anchorage, and for
making repairs, for loading, unloading, depositing, or trans-
shipping cargoes either in transit or destined for the service
of the Canal and for other works pertaining to the Canal.
ARTICLE X
The Republic of Panama agrees that there shall not be
imposed any taxes, national, municipal, departmental, or of

any other class, upon the Canal, the railways and auxiliary
works, tugs and other vessels employed in the service of the
Canal, store houses, work shops, offices, quarters for laborers,
factories of all kinds, warehouses, wharves, machinery and
other works, property, and effects appertaining to the Canal
or railroad and auxiliary works, or their officers or employ-
ees, situated within the cities of Panama and Colon, and that
there shall not be imposed contributions or charges of a per-
sonal character of any kind upon officers, employees, labor-
ers, and other individuals in the service of the Canal and
railroad and auxiliary works.
ARTICLE XI
The United States agrees that the official dispatches of the
Government of the Republic of Panama shall be transmitted
over any telegraph and telephone lines established for canal
purposes and used for public and private business at rates not
higher than those required from officials in the service of the
United States.
ARTICLE XII
The Government of the Republic of Panama shall permit
the immigration and free access to the lands and workshops
of the Canal and its auxiliary works of all employees and
workmen of Whatever nationality under contract to work
upon or seeking employment upon or in any wise connected
with the said Canal and its auxiliary works, with their respec-
tive families, and all such persons shall be free and exempt
from the military service of the Republic of Panama.
ARTICLE XIII
The United States may import at any time into the said
zone and auxiliary lands, free of custom duties, imposts,

taxes, or other charges, and without any restrictions, any and
all vessels, dredges, engines, cars, machinery, tools, explosives,
materials, supplies, and other articles necessary and conven-
ient in the construction, maintenance, operation, sanitation
and protection of the Canal and auxiliary works, and all pro-
visions, medicines, clothing, supplies and other things neces-
sary and convenient for the officers, employees, workmen
and laborers in the service and employ of the United States
and for their families. If any such articles are disposed of for
use outside of the zone and auxiliary lands granted to the
United States and within the territory of the Republic, they
shall be subject to the same import or other duties as like arti-
cles imported under the laws of the Republic of Panama.
ARTICLE XIV
As the price or compensation for the rights, powers and
privileges granted in this convention by the Republic of
Panama to the United States, the Government of the United
States agrees to pay to the Republic of Panama the sum of ten
million dollars ($10,000,000) in gold coin of the United
States on the exchange of the ratification of this convention
and also an annual payment during the life of this convention
of two hundred and fifty thousand dollars ($250,000) in like
gold coin, beginning nine years after the date aforesaid.
The provisions of this Article shall be in addition to all
other benefits assured to the Republic of Panama under this
convention.
But no delay or difference of opinion under this Article or
any other provisions of this treaty shall affect or interrupt the
full operation and effect of this convention in all other respects.
ARTICLE XV

The joint commission referred to in Article VI shall be
established as follows:
The President of the United States shall nominate two per-
sons and the President of the Republic of Panama shall nom-
inate two persons and they shall proceed to a decision; but in
case of disagreement of the Commission (by reason of their
being equally divided in conclusion) an umpire shall be
appointed by the two Governments who shall render the
decision. In the event of the death, absence, or incapacity of a
Commissioner or Umpire, or of his omitting, declining or
ceasing to act, his place shall be filled by the appointment of
another person in the manner above indicated. All decisions
by a majority of the Commission or by the Umpire shall be
final.
ARTICLE XVI
The two Governments shall make adequate provision by
future agreement for the pursuit, capture, imprisonment,
576 Panama Canal Treaty of 1903
detention and delivery within said zone and auxiliary lands
to the authorities of the Republic of Panama of persons
charged with the commitment of crimes, felonies or misde-
meanors without said zone and for the pursuit, capture,
imprisonment, detention and delivery without said zone to
the authorities of the United States of persons charged with
the commitment of crimes, felonies and misdemeanors
within said zone and auxiliary lands.
ARTICLE XVII
The Republic of Panama grants to the United States the
use of all the ports of the Republic open to commerce as
places of refuge for any vessels employed in the Canal enter-

prise, and for all vessels passing or bound to pass through the
Canal which may be in distress and be driven to seek refuge
in said ports. Such vessels shall be exempt from anchorage
and tonnage dues on the part of the Republic of Panama.
ARTICLE XVIII
The Canal, when constructed, and the entrances thereto
shall be neutral in perpetuity, and shall be opened upon the
terms provided for by Section I of Article three of, and in
conformity with all the stipulations of, the treaty entered into
by the Governments of the United States and Great Britain
on November 18, 1901.
ARTICLE XIX
The Government of the Republic of Panama shall have the
right to transport over the Canal its vessels and its troops and
munitions of war in such vessels at all times without paying
charges of any kind. The exemption is to be extended to the
auxiliary railway for the transportation of persons in the ser-
vice of the Republic of Panama, or of the police force charged
with the preservation of public order outside of said zone, as
well as to their baggage, munitions of war and supplies.
ARTICLE XX
If by virtue of any existing treaty in relation to the terri-
tory of the Isthmus of Panama, whereof the obligations shall
descend or be assumed by the Republic of Panama, there
may be any privilege or concession in favor the Government
or the citizens and subjects of a third power relative to an
interoceanic means of communication which in any of its
terms may be incompatible with the terms of the present
convention, the Republic of Panama agrees to cancel or
modify such treaty in due form, for which purpose it shall

give to the said third power the requisite notification within
the term of four months from the date of the present con-
vention, and in case the existing treaty contains no clause
permitting its modification or annulment, the Republic of
Panama agrees to procure its modification or annulment in
such form that there shall not exist any conflict with the stip-
ulations of the present convention.
ARTICLE XXI
The rights and privileges granted by the Republic of
Panama to the United States in the preceding Articles are
understood to be free of all anterior debts, liens, trusts, or lia-
bilities, or concessions or privileges to other Governments,
corporations, syndicates or individuals, and consequently, if
there should arise any claims on account of the present con-
cessions and privileges or otherwise, the claimants shall
resort to the Government of the Republic of Panama and not
to the United States for any indemnity or compromise which
may be required.
ARTICLE XXII
The Republic of Panama renounces and grants to the
United States the participation to which it might be entitled in
the future earnings of the Canal under Article XV of the con-
cessionary contract with Lucien N. B. Wyse now owned by the
New Panama Canal Company and any and all other rights or
claims of a pecuniary nature arising under or relating to said
concession, or arising under or relating to the concessions to
the Panama Railroad Company or any extension or modifica-
tion thereof; and it likewise renounces, confirms and grants to
the United States, now and hereafter, all the rights and prop-
erty reserved in the said concessions which otherwise would

belong to Panama at or before the expiration of the terms of
ninety-nine years of the concessions granted to or held by the
above mentioned party and companies, and all right, title and
interest which it now has or many hereafter have, in and to the
lands, canal, works, property and rights held by the said com-
panies under said concessions or otherwise, and acquired or
to be acquired by the United States from or through the New
Panama Canal Company, including any property and rights
which might or may in the future either by lapse of time, for-
feiture or otherwise, revert to the Republic of Panama, under
any contracts or concessions, with said Wyse, the Universal
Panama Canal Company, the Panama Railroad Company and
the New Panama Canal Company.
The aforesaid rights and property shall be and are free and
released from any present or reversionary interest in or claims
of Panama and the title of the United States thereto upon con-
summation of the contemplated purchase by the United States
from the New Panama Canal (company, shall be absolute, so
far as concerns the Republic of Panama, excepting always the
rights of the Republic specifically secured under this treaty.
ARTICLE XXIII
If it should become necessary at any time to employ
armed forces for the safety or protection of the Canal, or of
the ships that make use of the same, or the railways and aux-
iliary works, the United States shall have the right, at all times
and in its discretion, to use its police and its land and naval
forces or to establish fortifications for these purposes.
ARTICLE XXIV
No change either in the Government or in the laws and
treaties of the Republic of Panama shall, without the consent

of the United States, affect any right of the United States
under the present convention, or under any treaty stipulation
between the two countries that now exists or may hereafter
exist touching the subject matter of this convention.
If the Republic of Panama shall hereafter enter as a con-
stituent into any other Government or into any union or
Panama Canal Treaty of 1903 577
confederation of states, so as to merge her sovereignty or
independence in such Government, union or confederation,
the rights of the United States under this convention shall not
be in any respect lessened or impaired.
ARTICLE XXV
For the better performance of the engagements of this
convention and to the end of the efficient protection of the
Canal and the preservation of its neutrality, the Government
of the Republic of Panama will sell or lease to the United
States lands adequate and necessary for naval or coaling sta-
tions on the Pacific coast and on the western Caribbean coast
of the Republic at certain points to be agreed upon with the
President of the United States.
ARTICLE XXVI
This convention when signed by the Plenipotentiaries of
the Contracting Parties shall be ratified by the respective
Governments and the ratifications shall be exchanged at
Washington at the earliest date possible.
In faith whereof the respective Plenipotentiaries have
signed the present convention in duplicate and have hereunto
affixed their respective seals.
Done at the City of Washington the 18th day of November
in the year of our Lord nineteen hundred and three.

JOHN HAY
P. BUNAU VARILLA
578 Panama Canal Treaty of 1903
The Federal Reserve Act established the modern banking
system of the United States. Designed to provide elasticity of
the money supply and to be a lender of last resort for banks,
the Federal Reserve (Fed) regulates the money supply by
increasing or decreasing interest rates. The Fed also acts as a
clearinghouse for financial transactions. During its nine
decades of operation the policies of the Fed have helped
stabilize the U.S. economy.
Source: Public Statutes at Large, Vol. 38, Part I, pp. 251–275.
An Act to provide for the establishment of Federal reserve
banks, to furnish an elastic currency, to afford means of
rediscounting commercial paper, to establish a more
effective supervision of banking in the United States, and
for other purposes.
Be it enacted by the Senate and the House of Represen-
tatives of the United States of America in Congress assem-
bled, That the short title of this Act shall be the “Federal
Reserve Act.”
Whenever the word “bank” is used in this Act, the word
shall be held to include State bank, banking association, and
trust company, except where national banks or Federal
reserve banks are specifically referred to.
The terms “national bank” and “national banking associa-
tion” used in this Act shall be held to be synonymous and
interchangeable. The term “member bank” shall be held to
mean any national bank, State bank, or bank or trust com-
pany which has become a member of one of the reserve

banks created by this Act. The term “board” shall be held to
mean Federal Reserve Boards; the term “district” shall be held
to mean Federal Reserve district; the term “reserve bank”
shall be held to mean Federal reserve bank.
FEDERAL RESERVE DISTRICTS.
Sec. 2. As soon as practicable, the Secretary of the Treasury,
the Secretary of Agriculture and the Comptroller of the Cur-
rency, acting as “The Reserve Bank Organization Committee,”
shall designate not less than eight nor more than twelve cities
to be known as Federal Reserve cities, and shall divide the con-
tinental United States, excluding Alaska, into districts, each
district to contain only one of such Federal reserve cities. The
determination of said organization committee shall not be
subject to review except by the Federal Reserve Board when
organized: Provided, That the districts shall be apportioned
with due regard to the convenience and customary course of
business and shall not necessarily be coterminous with any
State or States. The districts thus created may be readjusted
and new districts may from time to time be created by the
Federal Reserve Board, not to exceed twelve in all. Such dis-
tricts shall be known as Federal reserve districts and may be
designated by number. A majority of the organization com-
mittee shall constitute a quorum with authority to act.
Said organization committee shall be authorized to employ
counsel and expert aid, to take testimony, to send for persons
and papers, to administer oaths, and to make such investiga-
tion as may be deemed necessary by the said committee in de-
termining the reserve districts and in designating the cities
within such districts where such Federal reserve banks shall be
severally located. The said committee shall supervise the

organization in each of the cities designated of a Federal re-
serve bank, which shall include in its title the name of the city
in which it is situated, as “Federal Reserve Bank of Chicago.”
Under regulations to be prescribed by the organization
committee, every national banking association in the United
States is hereby required, and every eligible bank in the
United States and every trust company within the District of
Columbia, is hereby authorized to signify in writing, within
sixty days after the passage of this Act, its acceptance of the
terms and provisions hereof. When the organization com-
mittee shall have designated the cities in which the Federal
reserve banks are to organized, and fixed the geographical
limits of the Federal reserve districts, every national banking
association within that district shall be required within thirty
days after notice from the organization committee, to sub-
scribe to the capital stock of such Federal reserve bank in a
sum equal to six per centum of the paid-up capital stock and
surplus of such bank, one-sixth of the subscription to be
payable on call of the organization committee or of the
Federal Reserve Board, one-sixth within three months and
Federal Reserve Act
(1913)
579
one-sixth within six months thereafter, and the remainder of
the subscription, or any part thereof, shall be subject to call
when deemed necessary by the Federal Reserve Board, said
payments to be in gold or gold certificates.
The shareholders of every Federal reserve bank shall be
held individually responsible, equally and ratably, and not for
one another, for all contracts, debts, and engagements of such

bank to the extent of the amount of their subscription to
such stock at the par value thereof in addition to the amount
subscribed, whether such subscriptions have been paid up in
whole or in part, under the provisions of this Act.
Any national bank failing to signify its acceptance of the
terms of this Act within the sixty days aforesaid, shall cease to
act as a reserve agent, upon thirty days notice, to be given
within the discretion of the said organization committee or
of the Federal Reserve Board.
Should any national banking association in the United
States now organized fail within one year after the passage of
this Act to become a member bank or fail to comply with any
of the provisions of this Act applicable thereto, all of the
rights, privileges, and franchises of such association granted
to it under the national-bank Act, or under provisions of this
Act, shall be thereby forfeited. Any noncompliance with or
violation of this Act shall, however, be determined and
adjudged by any court of the United States of competent jur-
isdiction in a suit brought for that purpose in the district or
territory in which such bank is located, under direction of the
Federal Reserve Board, by the Comptroller of the Currency in
his own name before the association shall be declared dis-
solved. In cases of such noncompliance or violation, other
than the failure to become a member bank under the provi-
sions of this Act, every director who participated in or as-
sented to the same shall be held liable in his personal or
individual capacity for all the damages which said bank, its
shareholders, or any other person shall have sustained in con-
sequence of such violation.
Such dissolution shall not take away or impair any remedy

against such corporation, its stockholders or officers, for any
liability or penalty which shall have been previously incurred.
Should the subscriptions by banks to the stock of said
Federal reserve banks or any one or more of them be, in the
judgment of the organization committee, insufficient to pro-
vide the amount of capital required therefor, then and in that
event the said organization committee may, under conditions
and regulations to be prescribed by it, offer to public sub-
scription at par an amount of stock in said Federal reserve
banks, or any one or more of them, as said committee shall
determine, subject to the same conditions as to payment and
stock liability as provided for member banks.
No individual, copartnership, or corporation other than a
member bank of its district shall be permitted to subscribe
for or to hold at any time more than $25,000 par value of
stock in any Federal reserve bank. Such stock shall be known
as public stock and may be transferred on the books of the
Federal reserve bank by the chairman of the board of direc-
tors at such bank.
Should the total subscriptions by banks and the public to
the stock of said Federal reserve banks, or any one or more of
them, be, in the judgment of the organization committee,
insufficient to provide the amount of capital required there-
for, then and in that event the said organization committee
shall allot to the United States such an amount of said stock
as said committee shall determine. Said United States stock
shall be paid for at par out of any money in the Treasury not
otherwise appropriated, and shall be held by the Secretary of
the Treasury and disposed of for the benefit of the United
States in such manner, at such times, and at such price, not

less than par, as the Secretary of the Treasury shall determine.
Stock not held by member banks shall not be entitled to
voting power.
The Federal Reserve Board is hereby empowered to adopt
and promulgate rules and regulations governing the transfers
of said stock.
No Federal reserve bank shall commence business with a
subscribed capital less than $4,000,000. The organization of
reserve districts and Federal reserve cities shall not be con-
strued as changing the present status of reserve cities and
central reserve cities, except in so far as this Act changes the
amount of reserves that may be carried with approved
reserve agents located therein. The organization committee
shall have power to appoint such assistants and incur such
expenses in carrying out the provisions of this Act as it shall
be deemed necessary; and such expenses shall be payable by
the Treasurer of the United States upon voucher approved by
the Secretary of the Treasury, and the sum of $100,000, or so
much thereof as may be necessary, is hereby appropriated,
out of the moneys in the Treasury not otherwise appropri-
ated, for the payment of such expenses.
BRANCH OFFICES.
Sec. 3. Each Federal reserve bank shall establish branch
banks within the Federal reserve district in which it is located
and may do so in the district of any Federal reserve bank
which may have been suspended. Such branches shall be
operated by a board of directors under rules and regulations
approved by the Federal Reserve Board. Directors of branch
banks shall possess the same qualifications as directors of the
Federal reserve banks. Four of said directors shall be selected

by the reserve bank and three by the Federal Reserve Board,
and they shall hold office during the pleasure, respectively, of
the parent bank and the Federal Reserve Board. The reserve
bank shall designate one of the directors as manager.
FEDERAL RESERVE BANKS.
Sec. 4. When the organization committee shall have estab-
lished Federal reserve districts as provided in section two of
this Act, a certificate shall be filed with the Comptroller of the
Currency showing the geographical limits of such districts
and the Federal reserve city designated in each of such dis-
tricts.
The Comptroller of the Currency shall thereupon cause to
be forwarded to each national bank located in each district,
and to other banks declared to be eligible by the organization
committee which may apply therefor, an application blank in
form to be approved by the organization committee, which
blank shall contain a resolution to be adopted by the board of
580 Federal Reserve Act
directors of each bank executing such application, authoriz-
ing a subscription to the capital stock of the Federal reserve
bank organizing in that district in accordance with the provi-
sions of this Act.
When the minimum amount of capital stock prescribed
by this Act for the organization of any Federal reserve bank
shall have been subscribed and allotted, the organization
committee shall designate any five banks of those whose
applications have been received, to execute a certificate of
organization, and thereupon the banks so designated shall,
under their seals, make an organization certificate which shall
specifically state the name of such Federal reserve bank, the

territorial extent of the district over which the operations of
such Federal reserve bank are to be carried on, the city and
the State in which said bank is to located, the amount of cap-
ital stock and the number of shares into which the same is
divided, the name and place of doing business of each bank
executing such certificate, and of all banks which have sub-
scribed to the capital stock of such Federal reserve bank and
the number of shares subscribed by each, and the fact that the
certificate is made to enable those banks executing same, and
all banks which have subscribed or may thereafter subscribe
to the capital stock of such Federal reserve bank, to avail
themselves of the advantages of this Act.
The said organization certificate shall be acknowledged
before a judge of some court of record or notary public; and
shall be, together with the acknowledgment thereof, authen-
ticated by the seal of such court, or notary, transmitted to the
Comptroller of the Currency, who shall file, record and care-
fully preserve the same in his office.
Upon the filing of such certificate with the Comptroller of
the Currency as aforesaid, the said Federal reserve bank shall
become a body corporate and as such, and in the name des-
ignated in such organization certificate, shall have power—
First. To adopt and use a corporate seal.
Second. To have succession for a period of twenty years
from its organization unless it is sooner dissolved by an Act
of Congress, or unless its franchise becomes forfeited by
some violation of law.
Third. To make contracts.
Fourth. To sue and be sued, complain and defend, in any
court of law or equity.

Fifth. To appoint by its board of directors, such officers
and employees as are not otherwise provided for in this Act,
to define their duties, require bonds of them and fix the
penalty thereof, and to dismiss at pleasure such officers or
employees.
Sixth. To prescribe by its board of directors, by in-laws not
inconsistent with law, regulating the manner in which its gen-
eral business may be conducted, and the privileges granted to
it by law may be exercised and enjoyed.
Seventh. To exercise by its board of directors, or duly
authorized officers or agents, all powers specifically granted
for the provisions of this Act and such incidental powers as
shall be necessary to carry on the business of banking within
the limitations prescribed by this Act.
Eighth. Upon deposit with the Treasurer of the United
States of any bonds of the United States in the manner pro-
vided existing law relating to national banks, to receive from
the Comptroller of the Currency circulating notes in blank,
registered and countersigned as provided by law, equal in
amount to the par value of the bonds so deposited, such
notes to be issued under the same conditions and provisions
of law as relate to the issue of circulating notes of national
banks secured by bonds of the United States bearing the cir-
culating privilege, except that the issue of such notes shall not
be limited to the capital stock of such Federal reserve bank.
But no Federal reserve bank shall transact any business
except such as is incidental and necessarily preliminary to its
organization until it has been authorized by the Comptroller
of the Currency to commence business under the provisions
of this Act.

Every Federal reserve bank shall be conducted under the
supervision and control of a board of directors.
The board of directors shall perform the duties usually
appertaining to the office of directors of banking associations
and all such duties as are prescribed by law.
Said board shall administer the affairs of said bank fairly
and impartially and without discrimination in favor or
against any member bank or banks and shall, subject to the
provisions of law and the orders of the Federal Reserve
Board, extend to each member bank such discounts,
advancements and accommodations as may be safely and
reasonably made with due regard for the claims and demands
of other member banks.
Such board of directors shall be selected as hereinafter
specified and shall consist of nine members, holding office
for three years, and divided into three classes, designated as
classes A, B, and C.
Class A shall consist of three members, who shall be cho-
sen by and be representative of the stock-holding banks.
Class B shall consists of three members, who at the time of
their election shall be actively engaged in their district in
commerce, agriculture or some other industrial pursuit.
Class C shall consist of three members who shall be desig-
nated by the Federal Reserve Board. When the necessary sub-
scriptions to the Capital stock have been obtained for the
organization of any Federal reserve bank, the Federal Reserve
Board shall appoint the class C directors and shall designate
one of such directors as chairman of the board to be selected.
Pending the designation of such chairman, the organization
committee shall exercise the power and duties appertaining

to the office of chairman in the organization of such Federal
reserve bank.
No Senator or Representative in Congress shall be a mem-
ber of the Federal Reserve Board or an officer or a director of
a Federal reserve bank.
No director of class B shall be an officer, director, or
employee of any bank.
No director of class C shall be an officer, director, em-
ployee, or stockholder of any bank.
Directors of class A and B shall be chosen in the following
manner:
The chairman of the board of directors of the Federal
reserve bank of the district in which the bank is situated or,
pending the appointment of such chairman, the organization
Federal Reserve Act 581
of such chairman, the organization committee shall classify
the member banks of the districts into three groups or divi-
sions. Each group shall contain as nearly as may be one-third
of the aggregate number of the member banks of the district
and shall consist, as nearly as may be, of banks of similar cap-
italization. The groups shall be designated by number by the
chairman.
At a regularly called meeting of the board of directors of
each member bank in the district it shall elect by ballot a dis-
trict reserve elector and shall certify his name to the chairman
of the board of directors of the Federal reserve bank of the
district. The chairman shall make lists of the district reserve
electors thus named by banks in each of the aforesaid three
groups and shall transmit one list to each elector in each
group. Each member bank shall be permitted to nominate to

the chairman one candidate for director of class A and one
candidate for class B. The candidates so nominated shall be
listed by the chairman, indicating by whom nominated, and
a copy of said list shall, within fifteen days after its comple-
tion, be furnished by the chairman to each elector.
Every elector shall, within fifteen days after the receipt of
the said list, certify to the chairman his first, second, and
other choices of a director of class A and B, respectively, upon
a preferential ballot, on a form furnished by the chairman of
the board of directors of the Federal reserve bank of the dis-
trict. Each elector shall make a cross opposite the name of the
first, second, and other choices for a director of class A and
for a director of class B, but shall not vote more than one
choice for any candidate.
Any candidate having a majority of all votes cast in the col-
umn of first choice shall be declared elected. If no candidate
have a majority of all the votes in the first column, then there
shall be added together the votes cast by the electors for such
candidates in the second column and the votes cast for the
several candidates in the first column. If any candidate then
have a majority of the electors voting, by adding together the
first and second choices, he shall be declared elected. If no
candidate have a majority of electors voting when the first
and second choices shall have been added, then the votes cast
in the third column from other choices shall be added to-
gether in like manner, and the candidate then having the
highest number of votes shall be declared elected. An imme-
diate report of election shall be declared.
Class C directors shall be appointed by the Federal Reserve
Board. They shall have been for at least two years residents of

the district for which they are appointed, one of whom shall
be designated by said board as chairman of the board of
directors of the Federal reserve bank and as “Federal reserve
agent.”He shall be a person of tested banking experience; and
in addition to his duties as chairman of the board of directors
of the federal reserve bank he shall be required to maintain
under regulations to be established by the Federal Reserve
Board a local office of said board on the premises of the
Federal reserve bank. He shall make regular reports to the
Federal Reserve Board, and shall act as its official representa-
tive for the performance of the functions conferred upon it
by this Act. He shall receive an annual compensation to be
fixed by the Federal Reserve Board and paid monthly by the
Federal reserve bank to which he is designated. One of the
directors of class C, who shall be a person of tested banking
experience, shall be appointed by the Federal Reserve Board
as deputy chairman and deputy Federal reserve agent to exer-
cise the powers of the chairman of the board and Federal
reserve agent in case of absence or disability of his principal.
Directors of Federal reserve banks shall receive, in addi-
tion to any compensation otherwise provided, a reasonable
allowance for necessary expenses in attending meetings of
their respective boards, which amount shall be paid by the
respective Federal reserve banks. Any compensation that may
be provided by board of directors of Federal reserve banks for
directors, officers or employees shall be subject to the
approval of the Federal Reserve Board.
The Reserve Bank Organization Committee may, in
organizing Federal reserve banks, call such meetings of bank
directors in the several districts as may be necessary to carry

out the purposes of this Act, and may exercise the functions
herein conferred upon the chairman of the board of directors
of each Federal reserve bank pending the complete organiza-
tion of such bank.
At the first meeting of the full board of directors of each
Federal reserve bank, it shall be the duty of the directors of
classes A, B, and C respectively, to designate one of the mem-
bers of each class whose term of office shall expire in one year
from the first of January nearest to date of such meeting, one
whose term of office shall expire at the end of two years from
said date, and one whose term of office shall expire at the end
of three years from said date. Thereafter every director of a
Federal reserve bank chosen as hereinbefore provided shall
hold office for a term of three years. Vacancies that may occur
in the several classes of directors of Federal reserve banks may
be filled in the manner provided for the original selection of
such directors, such appointees to hold office for the unex-
pired terms of their predecessors.
STOCK ISSUES; INCREASE AND DECREASE OF
CAPITAL.
Sec. 5. 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 six per
centum of the said increase, one-half of said subscription to
be paid in the manner hereinbefore provided for original sub-
scription, and one-half subject to call of the Federal Reserve
Board. 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 six per centum of the paid-up capital stock and surplus of
said applicant bank, paying therefor its par value plus one-half
of one per centum a month from the period of the last divi-
582 Federal Reserve Act