the dividend, shall be carried to a fund to be designated the surplus fund, until such surplus fund shall amount to twenty per centum of its capital stock, and thereafter such surplus fund shall always be at least equal to twenty per centum of the capital stock of such bank, and whenever the same becomes impaired it shall be reimbursed in the manner provided for its accumulation. 11. Directors shall appoint examining committee. Committee shall report. The board of directors of each bank shall from time to time appoint from its members an examining committee, who shall examine the condition of the bank at least once every six months, or oftener, if required by the board; and such committee shall after each examination forthwith report to the board, giving in detail all items included in the assets of the bank which they have reason to believe are not of the value at which they appear on the books and records of the bank, and giving the value, in their judgment, of each of such items; and the board shall cause said report to be recorded in the minute. books of the bank. 12. Loans to officers. Overdrafts. Penalty. No bank shall make any loan to its president, its vice-president, its cashier, or to any of its directors, or any of its clerks, tellers, bookkeepers, agents, servants or other persons in its employ, until the proposition to make such a loan, stating the amount, terms and security, if any, offered therefor, shall have been submitted in writing, by the person desiring the same, to a meeting of the board of directors of such bank, or of the executive committee of such board, if any, and accepted and approved by the vote of a majority of those present constituting a quorum; no bank shall permit its president, its vice-president, its cashier, or any of its directors, clerks, tellers, bookkeepers, agents, servants, or other persons in its employ to become liable to it by reason of overdrawn account; any president, vice-president, director, cashier, teller, clerk or agent of any bank who knowingly violates this section, or who aids or abets any officer, clerk, or agent in any such violation, shall be deemed guilty of a misdemeanor and shall be punished by a fine of not more than one thousand dollars, or by imprisonment for not more than five years, or by both. 13. Reports. Publication. Penalty. Every bank shall make to the commissioner of banking and insurance not less than four reports during each year, according to the form which may be prescribed by him, verified by the oaths or affirmations of the president or vice-president and cashier of such bank, and attested by the signatures of at least three directors; every such report shall exhibit, in detail and under appropriate heads, the resources and liabilities of the bank at the close of business on any day past specified by the commissioner, and shall be transmitted to the commissioner within ten days after the receipt of a request or requisition therefor from him, and an abstract or summary of every such report in such form as shall be prescribed by the commissioner of banking and insurance, shall be published by the bank once in a newspaper published in the place where such bank is established, or, if there is no newspaper in the place then in one published nearest such place in the same county; and such proof of publication shall be furnished as may be required by the commissioner; such publication shall be made within two weeks after the filing of such report, the expense thereof to be borne by the bank; the commissioner shall also have power to call for special reports from any bank whenever in his judgment the same are necessary to a full and complete knowledge of its condition; every bank which fails to make and transmit any report required under this section shall be subject to a penalty of one hundred dollars for each day after the period herein specified that it delays to make and transmit its report, to be sued for and collected by the commissioner of banking and insurance in the name and for the benefit of the state. 14. Making false statements, reports, entries in books and exhibiting false papers punishable. Every director, officer, agent or clerk of any bank who wilfully and knowingly subscribes or makes any false statement of facts, or false entries in the books of such bank, or knowingly subscribes or exhibits any false paper, with intent to deceive any person authorized to examine as to the condition of such bank, or wilfully or knowingly subscribes to or makes any false report, shall be guilty of a high misdemeanor, and punished accordingly. 15. Bank may not loan on or purchase its shares. No bank shall make any loan or discount on the security of the shares of its own capital stock, nor be the purchaser or holder of any such shares unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith; and the stock so purchased or acquired shall within one year from the time of its purchase be sold or disposed of at public or private sale; provided, that nothing in this section contained shall apply to any loan or discount made before the passage of this act. 16. Rate of interest. Discounts. Every bank may demand and receive for loans on real and personal security or for notes, bills or other evidences of debt discounted or purchased, such rate of interest as may be agreed upon by the parties, not exceeding the lawful rate of interest; and it shall be lawful to receive the interest in advance, according to the ordinary usage of banking institutions. 17. Deposits of minors, and trust deposits. When any deposit shall be made by or in the name of any minor, the same shall be held for the exclusive right and benefit of such depositor, and free from the control or lien of all other persons, except creditors of such minor, and shall be paid, together with the dividends and interest thereon, to the person in whose name the deposit shall have been made, and the receipt or acquittance of such minor shall be a valid and sufficient release and discharge for such deposit, or any part thereof, to the bank. 18. Limitations as to amount of loans. The total liabilities to any bank of any person or of any company, corporation or firm, for money borrowed, including in the liabilities of a company or firm the liabilities of the several members thereof, shall at no time exceed ten per centum of the aggregate amount of the capital stock of such bank actually paid in, and of the permanent surplus fund of such bank; provided,* that the total liability of any officer or director to such bank shall at no time exceed ten per centum of the aggregate amount of the capital stock of such bank actually paid in, and of the permanent surplus fund of such bank; provided further, however, that the provisions of this section shall not be construed to apply to loans made by any bank to any county, city, town, township, borough, or municipality of this state; the following shall not be considered as money borrowed within the meaning of this section, namely: (1.) The discount of business or commercial paper made by other parties and actually owned by the person negotiating the same; (2.) The discount of bills of exchange drawn in good faith against actually existing values; (3.) The discount of paper based on collateral security other than promissory notes, the actual market value of which shall at all times exceed by at least ten per centum the amount loaned upon the same. 19. Contracts. Contracts made by any bank, pursuant to authority of the board of directors of such bank, shall be signed by the president or vice-president and cashier thereof, or such other officer as may be designated by the directors. * This proviso is probably unnecessary and its presence in the act due to an oversight. As originally drafted by the Commissioners this section provided that the total liabilities of any person, &c., should at no time exceed twenty per centum of the total capital stock and permanent surplus fund, but limited the total liability of any officer or director to ten per centum of the capital and surplus. While the bill was in the legislative committee "twenty" was changed to "ten" in the first clause, but the proviso was not stricken out. |