under this act, upon the consent in writing of the owners of two-thirds of the capital stock of such bank, and with the арproval of the commissioner of banking. Such stockholders shall make, execute and acknowledge articles of organization as required by this act, and shall set forth the said written consent of such stockholders. Upon the filing of said articles as provided by this act, and upon the approval of the commissioner of banking, such bank shall be deemed to be reorganized under this act, and thereupon all assets, real and personal, of such dissolved national bank shall be vested in and be and become the property of such reorganized bank, subject to all liabilities of such national bank not liquidated before such reorganization.

Consolidation of banks. SECTION 22. A bank, which is in good faith winding up its business, for the purpose of consolidating with some other bank, may transfer its resources and liabilities to the bank with which it is in process of consolidation; but no consolidation shall be made without the consent of the commissioner of banking, and not then to defeat or defraud any of the creditors in the collection of their debts against such banks, or either of them.

SECTION 23. Any bank or

Liquidation, when authorized. ganized or doing business under the provisions of this act may go into liquidation by a vote of its stockholders owning twothirds of the capital stock. Whenever a vote is taken to go into liquidation, it shall be the duty of the board of directors to cause notice of this fact to be certified under the seal of the bank by its president and cashier to the commissioner of banking, and publication thereof, notifying the creditors to present their claims against the bank for payment, shall be made once in each week for eight successive weeks in a newspaper published in the village, city or county in which the bank is located, and if no newspaper is there published, then in the newspaper published at the nearest county seat.

SECTION 24.

Bank may be placed in hands of commissioner. Any bank doing business under this act may place its affairs and assets under the control of the commissioner of banking, by posting a notice on its front door, as follows: "This bank is in the hands of the commissioner of banking." Immediately upon posting such notice, such bank shall notify the commissioner of banking of such action. The posting of such notice, or the taking possession of any bank by the commissioner of banking, shall be sufficient to place all its assets and property

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of whatever nature in the possession of the commissioner of banking, and shall operate as a bar to any attachment proceedings. For each and every day the commissioner of banking shall be so placed in possession of the bank, such bank shall pay to the said commissioner of banking a fee of ten dollars; all such fees shall be paid by the said commissioner to the state treasurer, to be placed to the credit of the general fund.

Cash reserve. SECTION 25. Every bank shall keep on hand at all times at least fifteen per cent. of its total deposits, of which such portion as the board of directors may determine, may be on deposit in banks approved by the commissioner of banking as reserve banks; except in the case of banks which shall be approved by the commissioner of banking as reserve banks, which banks shall at all times keep on hand at least twenty-five per cent. of their total deposits in lawful money or on deposit in banks subject to the approval of the commissioner of banking, as reserve banks. Cash items shall not be considered as a part of the

reserve of any bank.

Reserve to be kept up. SECTION 26. Whenever the reserve of any bank shall fall below the amount required herein to be kept, such bank shall not increase its loans or discounts otherwise than by discounting or purchasing bills of exchange payable at sight or on demand, and the commissioner of banking shall notify any bank whose reserve may be below the amount herein re quired, to make good such reserve, and in case the bank fails, for thirty days thereafter to make good such reserve, the commissioner of banking may notify the attorney general and he shall institute proceedings for the appointment of a receiver and to wind up the business of the bank.

Limit of loans. SECTION 27. The total liabilities of any person, co-partnership or corporation, to any bank, for money borrowed, including liabilities of the co-partnership, the liabilities of the several members thereof, except special partners, shall at no time exceed thirty per cent. of the amount of capital and surplus of such bank; but the discounting of bills of exchange drawn in good faith against actually existing values, and the discounting of commercial or business paper actually owned by the person negotiating the same, shall not be considered as money borrowed; provided, that by a two-thirds vote of the directors, the liabilities of any person, co-partnership or corporation may be increased to a total sum not exceeding the amount of the cap

Capital stock not to be held by bank. SECTION 28. No bank shall be the holder of or purchaser of any portion of its capital stock, unless such purchase shall be necessary to prevent loss upon a debt previously contracted in good faith. Stocks so purchased shall in no case be held by the bank for a longer time than six months if the stock can be sold for the amount of the claim of the bank against the same, and it must be sold for the best price obtainable within one year, or it shall be canceled, and shall then amount to a reduction of the capital stock; provided, that, if such reduction shall reduce the capital stock below the minimum required by law, such capital stock shall be again increased to the amount required by law as provided herein.

Loans to bank officials. SECTION 29. It shall not be lawful for any bank to loan to any of its officers, directors, clerks or employes any of the funds of the bank without a responsible endorser or sufficient collateral security, unless the same shall have been authorized, both as to amount and security, by a resolution of the board of directors, to be recorded.

Loans upon mortgages limited. SECTION 30. No bank shall lend an amount exceeding fifty per centum of the aggregate of its capital, surplus and deposits upon mortgages or any other form of real estate security, except when authorized as to amount, security and location in this and the adjoining states by resolution of two-thirds of its board of directors, properly entered upon its minutes.

No bank,

Assets not to be pledged as security. SECTION 31. banker, or bank officer shall give preference to any depositor or creditor by pledging the assets of the bank as collateral security; provided, that any bank may borrow money for temporary purposes, and may pledge assets of the bank not exceeding fifty per cent. in excess of the amount borrowed as collateral security. therefor; provided further, that whenever it shall appear that a bank is borrowing habitually for the purpose of reloaning, the commissioner of banking may require such bank to pay off such borrowed money. Nothing herein contained shall prevent any bank from rediscounting in good faith and indorsing any of its negotiable notes. It shall be unlawful for any bank to issue its certificate of deposit for the purpose of borrowing money. Neither shall any bank make partial payments upon certificates of deposit. In no case shall an overdraft of more than ninety days' standing be allowed as an asset of the bank.

Checks certified, when. SECTION 32. It shall be unlawful for any officer, clerk or agent of any bank doing business under this act to certify any check, draft or order drawn upon the bank unless the person, firm or corporation drawing such check, draft or order has on deposit with the bank at the time such check, draft or order is certified an amount of money equal to the amount specified in such check. Any check, draft or order so certified by the duly authorized officer shall be a good and valid obligation against such bank.

Interest rate. SECTION 33. No bank shall demand or receive for loans or discounts a rate of interest exceeding that allowed by law, excepting that it shall be lawful for any bank to receive interest in advance according to the ordinary usages of banking institutions.

Bad debts, what are. SECTION 34. All debts due to any bank, on which interest is past due and unpaid for a period of twelve months, unless the same are well secured or in process of collection, shall be considered bad debts and shall be charged off to the profit and loss account at the expiration of one year.

Surplus fund. SECTION 35. The board of directors of a bank 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, as they shall deem expedient; but before any such dividend is declared not less than one-tenth of the net profits of the bank for the preceding half year, or for such period as is covered by the dividend, shall be carried to a surplus fund, until such surplus fund shall amount to twenty per cent. of the capital stock. Any losses sustained by any bank 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 dividends shall be declared or paid by any such bank in excess of one-half of its net earnings until its surplus fund shall be fully restored to the amount required by law.

Dividends not to be declared, when. SECTION 36. No dividend shall be paid to any stockholder of a bank until the capital stock has been fully paid in and no dividend shall thereafter be declared or paid by the directors of any bank except out of the net profits properly applicable thereto, and which shall not in any way impair or diminish the capital; and if any such shall

restore the full amount thereof unless the capital be subsequently made good; and if the directors of any bank shall pay any dividend before the capital stock is fully paid in, or shall pay such dividend when the corporation is insolvent or in danger of insolvency, or not having reason to believe that there were sufficient net profits properly applicable thereto, to pay the same without impairing or diminishing the capital, they shall be jointly and severally liable to the creditors of the corporation at the time of declaring such dividends to double the amount thereof.

Embezzlement, how punished. SECTION 37. Every president, director, cashier, officer, teller, clerk or agent of any bank or mutual savings bank who embezzles, abstracts or willfully misapplies any of the moneys, funds, credits, or property of the bank or mutual savings bank, whether owned by it or held in trust, or who, without authority of the directors, issues or puts forth any certificate of deposit, draws any order or bill of exchange, makes any acceptance, assigns any note, bond, draft, bill of exchange, mortgage, judgment or decree; or who makes any false entry in any book, report or statement of the bank with intent in either case to injure or defraud the bank or mutual savings bank or any person or corporation, or to deceive any officer of the bank or mutual savings bank, or any other person, or any agent appointed to examine the affairs of such bank or mutual savings bank; or any person who, with like intent, aids, or abets any officer, clerk or agent in the violation of this section, upon conviction thereof shall be imprisoned in the state prison not to exceed twenty years.

Charter, how forfeited. SECTION 38. If the board of directors or a quorum thereof or any committee of such board of any bank shall knowingly violate or knowingly permit any of the officers, agents or employes of the bank to violate any of the provisions of this act, such directors shall jointly and severally be liable for the amount of the loss sustained by the bank; and if after a warning from the commissioner of banking they shall fail to make good any loss or damage resulting from such acts, or continue such conduct, it shall constitute a ground for the forfeiture of the charter of such bank, and it shall thereupon be the duty of the commissioner of banking to institute proceedings to enforce such forfeiture and to secure a dissolution and a winding up of the affairs of such bank.