rectors of every incorporated bank or trust company, doing business under this Act a committee of not less than three (3) members, whose duty it shall be to examine, every six (6) months, into the affairs of their bank or trust company, count its cash, carefully look over all loans and discounts and securities and compare its assets and liabilities with the accounts of the ledgers, ascertain whether the accounts are carefully kept and if the condition of the bank or trust company corresponds therewith; and whether the bank or company is in a sound condition; the result of which examination shall be reported to the Board of Directors at the next regular meeting thereafter and said report made part of the bank's records, and a copy of the report transmitted to the Bank Commissioner within ten (10) days. The Board of Directors, as a whole, may act as a committee above provided for.

SEC. 38. A bank or trust company may purchase, ac- 1917-51 quire, hold and convey real estate for the following purposes only:

First. Such as shall be necessary for the convenient transaction of its business including with its banking offices other apartments to rent as a source of income. Provided, however: That no bank or trust company shall invest in a banking building and lot an amount greater than fifty (50) per cent. of the capital and surplus of such bank or trust company.

Second. Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of business.

Third. Such as it shall purchase at sale on judgments, decrees, or mortgage foreclosures under securities held by it, but a bank or trust company shall not bid at such sale a larger amount than is necessary to satisfy its debts and costs.

Fourth. No real estate acquired in the cases contemplated in the second and third subdivisions preceding shall be held for a longer time than five (5) years, except extension is granted by the Bank Commissioner. Nothing in this section shall be construed to prevent a bank or trust company from loaning moneys upon real estate securities as provided by law, or a trust company holding and conveying real estate in trust as herein provided. Real estate shall be conveyed under the corporation seal of the bank or company, and the hand of the president or vice-president and cashier or assistant cashier.

SEC. 39. Every bank and trust company doing business 91-5!

under this Act shall have on hand at all times in available funds, not less than fifteen (15) per cent. of its aggregate

deposits, six (6) per cent. of which must be actual cash in its vaults; the remaining nine (9) per cent. may consist of balances due them from good solvent banks. Cash items shall not be considered and a part of the reserve of any bank or trust company.

SEC. 40. Whenever the reserve of any bank or trust company falls below the amount herein required to be kept, such bank or trust company shall not increase its loans or discounts otherwise than by discounting or purchasing bills of exchange, payable at sight or on demand; and the Bank Commissioner shall notify any bank or trust company whose reserve may be below the amount required herein to make good such reserve, and in case the bank or trust company fails for thirty (30) days thereafter to make good such reserve, or continually allows its reserve to fall below the required amount, the Commissioner is hereby authorized to proceed as under Section 76 of this Act.

SEC. 41. No bank or trust company shall employ its moneys, directly or indirectly, in trade or commerce, by buying and selling goods, chattels, wares and merchandise, nor make any loans or discounts on security of the shares of its own capital stock nor to 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 stock so purchased or acquired shall within six (6) months of the time of its purchase be sold or disposed of at public or private sale; after the expiration of six (6) months any such stock shall not be considered as a part of the assets of any bank or trust company; Provided: That it may hold and sell all kinds of property which may come into its possession as collateral security for loans or any ordinary collection of debts, as prescribed by law; Provided, further: That any goods or chattels coming into possession of any bank or trust company aforesaid shall be disposed of as soon as possible and shall not be considered as a part of the bank's or company's assets after the expiration of one (1) year from the date of acquiring

same.

SEC. 42. It shall be unlawful for any bank or trust company doing business under this Act to invest an amount greater than ten (10) per cent. of its paid in capital in the shares of other banking corporations or trust companies doing a banking business; Provided, further: That no such bank or trust company shall invest an amount greater than five (5) per cent. of its paid in capital in the shares of any one banking corporation or trust company doing a banking business.

Nothing in this Section shall prevent a bank or trust companying from purchasing, or taking over, stock in other corporations doing a banking business, if such purchase shall be necessary to prevent loss on debts previously contracted in good faith; but stock thus purchased or carried, if in excess of the above limitation, shall, within six (6) months from the time of its purchase, be sold or disposed of at public or private sale.

SEC. 43. No partnership, firm or individual transacting 1917-5!

a banking business in this State shall be permitted to carry any note or obligation of any such partnership, or firm or individual, or any of the members of such partnership or firm, as a part of the assets of the bank; and no director, officer, employee or agent of any corporation transacting a banking business in this State shall be permitted to borrow any of the funds of the bank or company upon his own note or obligation without first having obtained the approval of a majority of the Board of Directors of the bank or company, and the approval, if obtained, shall be properly recorded in the bank's or company's minute book in detail. And if the directors of any incorporated bank or trust company shall knowingly permit any of the officers, directors or employees of such bank or company to borrow the funds of such bank or company in an excessive or dishonest manner, or in a manner incurring great risk of loss to such bank or company, every director who participated in and assented to the same shall be held liable in his personal and individual capacities for all damage which the association, the bank, the shareholders, or any other person shall have sustained in consequence of such violation.

SEC. 44. The total liabilities of any bank or trust company, of any person or persons, or of any company, corporation or firm, for money loaned, including in the liabilities of the company or firm the liabilities of the several members thereof, except special partners, shall at no time exceed twenty-five (25) per cent of the aggregate paid in capital and surplus of such bank or company; but the discount of exchange drawn in good faith against actual existing values, and the discount of commercial or business paper actually owned by the persons negotiating the same, shall not be considered as money borrowed; Provided, however: That the foregoing limitations shall not apply to loans upon real estate or other collateral securities representing actual value or loans made on warehouse receipts and bills of lading.

SEC. 45. In all cases where money is borrowed the bank or trust company shall issue its bills payable or re-discount

some of its paper, and shall show the true amount of borrowed money on its books and in all reports and published statements under these heads.

SEC. 46. Whenever the overdrafts of the depositors of any bank or trust company, doing business under this Act, are, in the opinion or judgment of the Commissioner, excessive or of long standing, he may require such bank or trust companies to either collect or materially reduce the same or secure notes in lieu thereof.

SEC. 47. Banks or trust companies rediscounting or disposing of any notes or assets containing their endorsement or guarantee shall carry the same on their books, under liabilities, as re-discounts, until the same are actually paid by the makers, other than by renewal, or the borrowing bank or trust company itself takes up the paper.

It shall be unlawful for any bank or trust company to circulate or dispose of any paper containing its guarantee or endorsement, except when endorsed without recourse, without carrying the same on their books as a liability under the proper head.

SEC. 48. No owner, officer, agent, clerk or employee of the bank or trust company shall certify a check unless the amount thereof actually stands to the credit of the drawer on the books of the bank or company; and any person who shall wilfully violate this provision, shall, on conviction thereof, be deemed guilty of a felony and be punished by a fine not exceeding One Thousand Dollars ($1,000). Any such check so certified by a duly authorized person shall be a good and valid obligation of the bank or company in the hands of an innocent holder.

SEC. 49. When any minor, married woman or other person under disability shall make a deposit in any bank or trust company in his or her own name, such bank or company may pay such money on a check or order of such person, the same as in other cases, and such payments shall be in all respects valid in law.

SEC. 50. No bank or trust company shall be liable to a depositor for the payment by it of a forged or raised check, unless within three (3) months after the return to the depositor of the voucher of such payment, such depositor shall notify the bank or company that the check so paid is forged or raised.

SEC. 51. The Board of Directors of any bank or trust company may declare a dividend from so much of its net profits after providing for all expenses, losses, interest and taxes accrued or due from said bank or trust company as they shall deem expedient; but before any such dividend is declared not less than one-tenth (1/10) of the net profits of the bank or trust company for the preceding half year, or for such period as covered by the dividend, shall be carried to a surplus fund, until such surplus fund shall amount to twenty (20) per cent. of the paid in capital stock. Any losses sustained by any bank or trust company in excess of its undivided profits may be charged to its surplus account; Provided: That its surplus fund shall thereafter be reimbursed from its earnings, and no dividend shall be declared or paid by any such bank or trust company until its surplus fund shall be fully restored to the amount required by the law. Interest unpaid, although due or accrued, on any debts owing to the bank or trust company shall not be included in the calculation of its profits previous to a dividend.

SEC. 52. All dividends shall be declared at a meeting of the Board of Directors. A full and complete record of the proceedings and business of all such meetings shall be spread upon the bank's minute book; such record shall show the disposition of profits in detail, by indicating all poor or worthless items charged out and the amount of same, the amount of expenses charged out, the amount carried to surplus fund, if any, and the amount of dividend, and shall also indicate the amount of the net undivided profits remaining. Within ten (10) days after such meeting the president or cashier shall transmit to the Commissioner a certified copy of such record.

SEC. 53. Whenever it shall appear to the Commissioner that any bank or trust company does not keep books and accounts in such a manner as to enable him to readily ascertain the true condition of such bank or company, or are not such as to eliminate the possibility, as far as possible, of any loss through dishonesty of its officers or employees, or otherwise, he shall have power to require the officers of such bank or trust company or any of them, to open and keep such books or accounts as he may, in his discretion, determine and prescribe for the purpose of keeping accurate and convenient records of the transactions and accounts of such bank or company.

SEC. 54. Any officer or employee of any bank or trust company found by the Commissioner to be dishonest, reckless or incompetent, may be removed from office by the Board of Directors of the bank or company in which he is employed on the written order of the Bank Commissioner.

SEC. 55. The Bank Commissioner, by and with the approval of the Governor and Attorney General, shall have power to make such rules and regulations for the govern