SEC. 7. The capital stock of every company shall be Shares. divided into shares of one hundred dollars each, which shall be deemed personal property, and shall only be assignable on the books of the company, in such manner as its by-laws shall prescribe; each bank shall have a lien upon all the stock owned by its debtors, and no stock shall be transferred without the consent of a majority of the directors while the holder thereof is indebted to the company.

SEC. 8. No company shall take as security for any loan, Security. or discount a lien upon, any part of its capital stock; but the same security, both in kind and amount, shall be required of shareholders as of persons not shareholders; and no banking company shall be the holder or purchaser of any portion of the capital stock of it or any other incorporated company, unless such purchase shall be necessary to prevent loss upon a debt previously contracted in good faith, or security which at the time was deemed adequate to insure the payment of such debt, independent of any lien upon such stock; and stock so purchased shall in no case be held by the company so purchasing for a longer period of time than six months, if the same can be sold for what the stock costs at par.

SEC. 9. In all elections of directors, and in deciding all questions at the meetings of the stockholders, each share shall entitle the owner thereof to one vote. Stockholders may vote by proxies duly authorized in writing, but no officer or employe of the company shall act as proxy.

SEC. 10. The affairs of every company, formed and organized to carry on the business of banking under the provisions of this act, shall be managed by not less than three nor more than five directors, as may be determined by a majority in interest of the stockholdeas. Every director shall, during the whole term of his services, be a resident of this state. The directors of each banking company, collectively, shall own at least one-tenth of the capital stock; each director shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of the company, and not knowingly violate, or willingly permit to be violated, any of the provisions of this act; that he is the bonafide owner, in his own right, of the stock, specifiying the amount, standing in his name on the books of the company, and that the same is not hypothecated, or in any [way] pledged, as security for any loan obtained, or for any debt owing, which oath, subscribed by himself, and certified by the officer before whom it was taken, shall be filed and carefully preserved in the office of the recorder of the county in which the banking company is located.

SEC. 11. The directors of any banking company first elected shall hold their places until the first Monday in January next thereafter, and until their successors shall be elected and qualified; all subsequent elections shall be held annually on the first Monday of January, at the office of the

Each share shall repre

sent one vote.

Directors.

Stocks shall be owned by

directors. Oath of office.

Violation of

provisions of this act.

Election and term of office. Vacancies shall be filled.

Shall not is

sue note,

circulate as

money.

bank, and the directors so elected shall hold their places for one year, and until their successors are elected and qualified. But any director removing from the state shall thereby vacate his place. Any vacancy in the board shall be filled by appointment by the remaining directors; the director so appointed shall hold his place until the next annual election; and if, for any cause, an election of directors shall not be made at the time appointed, the company shall not for that cause be dissolved, but an election may be held on any subsequent day, thirty days' notice thereof having been given, in a newspaper printed and in general circulation in the county where the company is located.

SEC. 12. No banking company hereby authorized shall at any time issue, or have in circulation, any note, draft,

draft, etc., to bill of exchange. acceptance, certificate of deposit, or any other evidence of debt, which, from its character, form or appearance, shall be calculated or intended to circulate as money; and every violation of this section, by any officer or member of a banking company, shall be deemed and judged a misdemeanor, punished by fine or imprisonment, or both, in the discretion of the court having cognizance thereof, as now provided by law.

Penalty.

Shall have twenty per

SEC. 13. Each banking company shall at all times have on hand, of lawful money of the United States, an amount

centum of de- equal to at least twenty per centum of its deposits; and

posits on hand.

Deposits in other banks.

Limit of indebted

ness.

whenever the lawful money of any company shall fall below twenty per cent. of its deposits, such company shall not make any new loan or discount, otherwise than by discounting or purchasing bills of exchange payable at sight, nor make any dividend of its profits, until the required proportion of its deposits, and its lawful money of the United States, shall be restored; and for such purpose actual deposits with any solvent bank or banker, in the cities of New York, Boston, Philadelphia, and Baltimore, subject to be drawn against at sight, and payable in lawful money of the United States, or money actually invested in bonds of the United States, shall be deemed equivalent to lawful money of the United States.

SEC. 14 No banking company herein authorized shall at any time be indebted, or in any way liable, to an amount exceeding the amount of the capital stock at such time actually paid in and remaining as capital stock, undiminished by losses or otherwise, except on the following accounts: first, on account of moneys deposited with or collected by such company; second, on account of bills of exchange or drafts drawn against money actually paid on deposit to the credit of or due to such company; third, liabilities of its stockholders on account of moneys paid in as capital stock, and dividends thereon.

SEC. 15. No banking company shall, during the time it shall continue its operations as a bank, withdraw, or permit to be withdrawn, either in form of dividends, loans to stockholders for a longer period of time than six months, or in any other manner, any portion of its capital stock; and if losses shall have been at any time sustained by any banking company, equal to or exceeding its undivided profits then on hand, no dividend shall be made; and no dividend shall ever be made by any banking company, while it shall continue its banking operations, to an amount greater than its net profits then on hand, deducting therefrom its losses and bad and suspended debts; and all debts due to a banking company on which interest is past due and unpaid for a period of six months, unless the same shall be well secured and in process of collection, shall be considered bad or suspended debts within the meaning of this act.

Time for which loans may be

made. Losses.

When no dividend to be made.

SEC. 16. The directors of each banking company shall, Dividends. semi-annually, declare a dividend of so much of the net profits of the company as they shall judge expedient; but such company shall, before the declaration of a dividend, carry one-tenth part of its net profit of the preceding half year to its surplus fund, until the same shall amount to twenty per centum of its capital stock.

auditor of state.

SEC. 17. Every banking company shall make to the aud- Report of itor of state a report, according to the form which may be prescribed by him, verified by the oath of the president or cashier of such company, which report shall exhibit in detail, and under appropriate heads such as he shall require, the resources and liabilities of the company before the commencement of business in the morning of the first Monday of the months of January and July of each year, and shall transmit the same to the auditor of state within ten days thereafter.

Losses, discounts, rate

SEC. 18. Every banking company deriving its powers and privileges from this act may take, reserve, receive, and charge on any loan or discount made, or upon any bill of exchange, or ofher evidence of debt, at the rate of interest allowed by the laws of the state, on the amount of any such note, bill of exchange, or other evidence of debt so discounted, and no more; provided, however, that interest may be re- Proviso. ceived or taken in advance, at the time of making the loan or discount, according to the usual rules of banking; but the purchase, sale, or discount of a bill of exchange payable at another place than the place of such purchase, sale, or discount, at the current rate of discount or premium, shall not be considered a taking, receiving, or reserving of interest. And the knowingly taking, receiving, reserving, or charging a rate of interest greater than aforesaid shall be held and adjudged a forfeiture of the interest which the note, bill, or other evidence of debt carries with it, or which has been interest. agreed to be paid theeeon. And in case a greater rate of interest has been paid, the person or persons paying the same, or their legal representatives, may recover back, in any action of debt, the entire amount of interest thus paid from the company taking or receiving the same.

Limitation

of liabilities.

Preference of creditors.

Violation of

provisions of

this act.

SEC. 19. The total liabilities of any person, company, corporation, or firm, for money borrowed, including in the liabilities of the several members thereof to any banking company herein authorized, shall at no time exceed one-tenth part of the amount of the capital stock of such company actually paid in; provided, that the discount of bona fide bills of exchange drawn against actually existing values, and the discount of commercial or business paper actually owned by the person or persons, corporation or firm negotiating the same, shall not be considered money borrowed.

SEC. 20. All transfers of notes, bonds, bills of exchange, and other evidences of debt, owing to any banking company, or of deposit to its credit; all assignments of mortgages or other securities in real estate, or of judgements or decrees in its favor; all deposits of money, bullion, or other valuable things, for its use, or for the use of any of its stockholders or creditors; all payments of money to either, made after the commission of an act of insolvency, or in contemplation thereof, with a view to prevent the application of its assets in the manner described by law, or with the view to the preference of one creditor to another, shall be held utterly null and void. SEC. 21. If the directors of any banking company which shall have availed itself of the privileges of this act shall knowingly violate, or knowingly permit any of the officers, agents, or servants of such company to violate any of the provisions of this act, all the rights, privileges and franchises of said company, derived from this act, shall thereby be forfeited; such violation, however, to be determined and adjudged by a court of competent jurisdiction, agreeably to the laws of this state, and the practice of such court, before the corporation shall be declared dissolved; and in case of such violation, every director who participated in or assented to the same

Liabilities of shall be held liable, in his personal and individual capacity,

directors.

Embezzlement, etc.

Penalty.

for all damages which the company, its shareholders, or any other person, body politic or corporate, shall have sustained in consequence of such violation.

SEC. 22. Every president, director, cashier, teller, clerk, or agent of any banking company, who shall embezzle, abstract, or willfully misapply, any of the moneys, funds, or credits of such company, or shall, without authority from the directors, issue or put forth any certificate of deposit, draw any order, or bill of exchange, make any acceptance, assign any notes, bonds, drafts, or bills of exchange, mortgage, judgment, or decree, or shall make any false entry in any book, report, or statement of the company, with intent in either case to injure or defraud the company, or any other company, body politic or corporate, or any individual person, or to deceive any officer of the company, or any agent appointed to inspect the affairs of any banking company in this state, shall be guilty of an offense, and upon conviction thereof shall be confined in the penitentiary, at hard labor, not less than one year nor more than ten years.

of capital.

SEC. 23. If the original capital stock of any of such bank- Dimunition ing company shall in any manner be diminished, or any portion thereof be withdrawn for any purpose whatever, while any debts or demands against such company remain unsatisfied, no dividends shall be thereafter made on the shares of the capital stock of such company until the original amount of the capital stock shall be restored, either by contribution of the shareholders, or out of the profits of the business of such company; and in case any dividend shall be made while the capital stock shall remain so diminished or withdrawn, it shall be the duty of any court having competent jurisdiction, to make the necessary orders and decree for closing the affairs of such company, and dividing its effects among its creditors and shareholders.

SEC. 24. The shareholders of each company formed under the provisions of this act shall be held individually responsible, equably and ratably, and not one for another, for all contracts, debts, and engagements of such company, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares.

Liability of stockholders.

SEC. 25. It shall be the duty of the auditor, treasurer and Appoint exsecretary of state, or a majority of them, as often as once in aminers. each year, and without previous notice to such corporation, to appoint some suitable person in the vicinity of each banking company, who shall not be a stockholder in any bank of the state, who shall have power to make a thorough examination into all the affairs of the bank which he may be appointed to examine, and in so doing to examine any of the officers and agents of such bank on oath; and such agent shall make a detailed report of the condition of such bank to the auditor of state; and the banking companies herein authorized shall be subject to any other visitorial powerauthorized by law; and every agent appointed as in this section provided shall receive for his services at the rate of five dol- Compensalors for each day employed by him in such examination, and five dollars for every twenty-five miles he shall necessarily travel in the performance of his duty, which shall be paid by the banking company by him examined.

SEC. 26. The president and cashier of every company formed pursuant to the provisions of this act shall at all times keep a true and correct list of the names of all the shareholders of such company, and the amount of stock owned by each, and shall file a copy of such list in the office of the recorder of the county where any office of such company may be located, and also in the office of such company, and also in the office of the auditor of the state, in the months of January and July of each year.

SEC. 27. That the approval or rejection of this act shall be submitted to the vote of the electors of this state, at the general election in October next. At such election the electors desiring to vote for its approval shall place upon their ballots for the officers then to be elected the words, "For the

tion of examiners.

Record of stockholders.

Submit to votes of state for rejection or approval and manner

thereof.