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 usagez 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 be paid, every stockholder receiving the same shall be liable to

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 wilfully 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 mutal 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.

Liability of stockholders. SECTION 39. The stockholders of every bank shall be individually liable, equally and ratably, not one for another, for the benefit of creditors of said bank to the amount of their stock at the par value thereof, in addition to the amount invested in said stock. Such liability shall continue for six months after any transfer of stock, as to the affairs of the bank at the time and prior to the date of the transfer. But persons holding stock as executors, administrators, guardians or trustees, and persons holding stock as collateral security, shall not be personally liable as stockholders, but the assets or funds in their hands constituting the trust shall be liable to the same extent as the testator, intestate, ward or person interested in such trust fund would be if living, or competent to act, and the person pledging such stock shall be deemed the stockholder and liable under this section.

Shares of stock, when not transferable. SECTION 40. The shares of stock of an incorporated bank shall be deemed personal property, and shall be transferred on the books of the bank in such manner as the by-laws thereof may direct, and no transfer of stock shall be valid while the bank is under notice to make good the impairment of its capital, as provided in section 7, chapter 1, of this act, nor until such impairment shall have been made good. All transfers of stock shall be certified to the commissioner of banking immediately.

Deposits by minors and unmarried females; trust deposits, SECTION 41. Whenever any deposit shall be made in any bank by and in the name of any minor, or female being or thereafter becoming a married woman, the same shall be held for the ex clusive right and benefit of such minor, or female, and free from the control or lien of all persons whatsoever, except creditors, and shall be paid with any interest due thereon, to the person in whose name the deposit shall have been made, and the receipt of such minor or female shall be a sufficient release or discharge for such deposit to the bank. Whenever any deposit shall be made by any person in trust for another, and no other or further notice of the existence and terms of a legal and valid trust shall have been given in writing to such bank, in the event of the death of the trustee, the same or any part thereof, and any interest due thereon, may be paid to the person for whom the said deposit was made.

Legal process, how served, SECTION 42. Legal process against any bank may be served upon such bank in the manner

now provided by law for such service on other private corporations organized under the laws of this state.

Circulating notes, when issuable. SECTION 43. In the event that the congress of the United States shall hereafter remove the tax on bank circulation or provide for the establishment of circulation of banks organized under state laws, any bank organized or doing business under this act shall have the power to issue circulating notes or currency in accordance with any such act of congress, or under such regulations as the banking department of this state shall prescribe. The provisions of this section shall not be construed to permit any mutual savings bank or any loan and trust company or any other than a banking corporation to issue circulating notes.

SECTION 44.

Banks coming under the provisions of this act. The provisions of this act shall apply to, and govern, all banks organized and now existing within this state, and the powers, privileges, duties and restrictions conferred and imposed upon any bank existing and doing business under the laws of this state, are hereby abridged, enlarged, or modified as each particular case may require, to conform to the provisions of this act. Nothing in this act shall be construed to affect the legality of investments heretofore made, or to transactions heretofore had, pursuant to any provisions of law in force when such investments were made or transactions had. Every bank now existing and doing business within this state shall on or before. the first day of February next following the time when this act becomes operative, alter or amend its articles of organization, if necessary, to comply with the provisions of this act, and shall by said time make its business conform in all respects to the requirements of this act, except where such requirement is expressly waived herein.

Bank, unlawful use of term. SECTION 45. No person, co-partnership or corporation engaged in the banking business in this state, not subject to supervision and examination by the commissioner of banking, and not required to make reports to him. by the provisions of this act, shall make use of any office sign at the place where such business is transacted, having thereon any artificial or corporate name or other words indicating that such place or office is the place or office of a bank, nor shall such person or persons make use of or circulate any letter-heads, billheads, blank notes, blank receipts, certificates, circulars, or any written or printed or partly written and partly printed paper