NAME AND LOCATION ITH the consent of the Comptroller, and by the vote of the W shareholders owning two-thirds of the stock, a national bank may change its name or may change its location to any other locality in the same state not more than thirty miles distant. Due notice of the meeting at which the proposal to change a bank's name or location is to come up, must be given to the stockholders. The resolution adopting the proposal by a two-thirds vote and authorizing the Treasurer of the United States to assign to the bank under its new title any bonds held to secure circulation, must be sent to the Comptroller. An order for plates and circulation to conform to the new title should, of course, be submitted at the same time. (See "Corporate Existence," page 55.) No change of name or location is valid until the Comptroller's certificate of approval is issued, and a change of name does not in any way affect the liabilities or rights of the bank as they existed under the old name. SHAREHOLDERS (See "Organization," pages 23-32; "Changes in Capital," pages 44-48; "Liquidation,” pages 49-50; “Corporate Existence,” pages 55, etc.) Meetings-The annual meeting to elect directors is held "on such day in January of each year" as is specified in the Articles of Association. The law makes no provision as to notice of the annual meeting, but unless the time is definitely fixed in the Articles or By-laws of the bank, it seems that owners of the stock are entitled to the usual 30 days' notice. For all special meetings, notice should be given as provided for in the Articles, or, in the absence of such provision, 30 days in advance. Votes-Each shareholder is entitled to one vote on each share of stock. No shareholder whose liability for stock subscription is unpaid and past due is allowed to vote. Cumulative voting is not allowed. For example, if 5 directors are to be elected, the owner of 20 shares could not cast 100 votes in favor of one person, but is at liberty only to cast 20 votes for each of the 5 candidates. The minutes of the annual meeting of shareholders of a national bank should show that sufficient stock was represented at the meeting, in person and by proxy, to constitute a legal quorum under the laws of the state in which the association is located. At meetings where the bank's Articles of Association are to be amended, a majority vote of all the stock of the bank must be cast, except where a larger proportion is required by law. A resolution providing for change in capital, consolidation, liquidation, or change in name or location, requires the affirmative vote of two-thirds of the stock of the bank. Proxy Shareholders may vote by proxy, duly authorized in writing, but no "officer, clerk, teller, or bookkeeper" of the bank can act as proxy. Supported by court decisions, the Comptroller holds that a national bank director is an "officer within every sense and meaning of the word." The proxy cannot vote when the owner of the stock is present and votes. Even when by its terms it is made "irrevocable," a proxy is always revocable. An ordinary proxy, being intended for election only, does not empower the proxy to vote for increased capitalization, consolidation or liquidation unless specific power so to do is given. Liability-National bank stockholders are subjected to an extra liability ("for all contracts, debts and engagements" of the bank) equal to the amount of stock held. Who may subscribe to stock-Following are the specific circumstances applying to subscription to a national bank's stock: (a) Guardian-May subscribe if he shows proper authority. (d) State, county, township or municipality—Subscriptions should not (e) Order, lodge, association, etc.-Evidence must be produced to show the organization is authorized by its rules to buy stock, and that it is legally and financially responsible for an assessment on this stock were one necessary under the National Bank Act. Lists-Every national bank must at all times keep an up-to-date list of the names and residences of all shareholders, and a copy of this list, as of the first Monday of July of each year, verified by oath by the president or cashier, must be forwarded to the Comptroller. T DIVIDENDS HE National Bank Act provides that directors of any national bank "may, semi-annually, declare a dividend of so much of the net profit of the association as they shall judge expedient." Although the word "semi-annually" occurs in the language of the act, there appears to be no prohibition against declaration of more frequent dividends, when the bank's directors deem such a course advisable. Within ten days after a dividend has been declared the president or cashier of the bank must attest to the Comptroller under oath the amount of the dividend, and the amount of net earnings in excess of such dividends. Circumstances in which dividends may not be declared are: (a) If the bank's surplus fund is not equal to 20 per cent. of its capital stock, and one-tenth of the net profits for the preceding half year is not carried to surplus. (b) When the bank's balance at the Federal Reserve Bank is below the amount required by law. (c) If losses have at any time been sustained equal to or exceeding the bank's undivided profits then on hand. (d) No dividend shall be made, while a bank continues its operation, to an amount greater than the net profits on hand, minus the bank's losses and bad debts. "Bad debts" within the meaning of the National Bank Act are those debts on which interest is past due and unpaid for a period of six months, unless such debts are well secured, and in process of collection. LOANS A.-GRANTED BY A NATIONAL BANK 1. On Improved Farm Land or Other Real Estate-Until the passage of the Federal Reserve Act it was not lawful for a national bank to loan money on real estate. The Reserve Act, however, provided that any national bank not situated in a central reserve city (i.e., New York, Chicago, or St. Louis) could make loans secured by improved and unencumbered farm land situated : Within its Federal Reserve District; Within one hundred miles of the place in which the bank is located, and that it could also make loans secured by improved and unen- Within one hundred miles of the place in which the bank is located, In all such loans, certain conditions and restrictions must be ob- (a) There must be no prior lien upon the land. (b) The amount of the loan must not exceed 50% of the actual value (c) The aggregate amount of loans on farm land and other real estate (d) The right of a national bank to "make loans" under this section (e) No loan made upon the security of farm lands shall be for longer (f) Although this time limit must be rigidly observed, nevertheless, 1 For definition of "time deposits" see "Reserve Requirements," page 76. |