scribed in the by-laws or articles of association. Every HOW PAYMENT OF THE CAPITAL STOCK MUST BE MADE 1864, c. 106, 36. Sec. 5140.-At least fifty per centum of the capital Act June 3, stock of every association shall be paid in before it shall sec. 14:13 be authorized to commence business; and the remainder Stat. L., 103. of the capital stock of such association shall be paid in installments of at least ten per centum each, on the whole amount of the capital, as frequently as one installment at the end of each succeeding month from the time it shall be authorized by the Comptroller of the Currency to commence business; and the payment of each installment shall be certified to the Comptroller, under oath, by the president or cashier of the association. PROCEEDINGS IF SHAREHOLDER FAILS TO PAY INSTALL MENTS. 1864, c. 106, 15; 13 37. Sec. 5141.-Whenever any shareholder, or his as- Act June 3, signee, fails to pay any installment on the stock when the sec same is required by the preceding section to be paid, the Stat. L., 103. directors of such association may sell the stock of such delinquent shareholder at public auction, having given three weeks' previous notice thereof in a newspaper published and of general circulation in the city or county where the association is located, or if no newspaper is published in said city or county, then in a newspaper published nearest thereto, to any person who will pay the highest price therefor, to be not less than the amount then due thereon, with the expenses of advertisement and sale; and the excess, if any, shall be paid to the delinquent shareholder. If no bidder can be found who will pay for such stock the amount due thereon to the association, and the cost of advertisement and sale, the amount previously paid shall be forfeited to the association, and such stock shall be sold as the directors may order, within six months from the time of such forfeiture, and if not sold it shall be canceled and deducted from the capital stock of the association. If any such cancellation and reduction shall reduce the capital of the association below the minimum of capital required by law, the capital stock shall, within thirty days from the date of such cancellation, be increased to the required amount; in default of which a receiver may be appointed, according to the provisions of section fifty-two hundred and thirty-four, to close up the business of the association. 1864, c. 106, NATIONAL BANKS MAY INCREASE CAPITAL STOCK. Act June 3, 38. Sec. 5142.-Any association formed under this Title sec. 13; 13 may, by its articles of association, provide for an increase Stat. L., 103. of its capital from time to time, as may be deemed expedient, subject to the limitations of this Title. But the maximum of such increase to be provided in the articles of association shall be determined by the Comptroller of the Currency; and no increase of capital shall be valid until the whole amount of such increase is paid in, and notice thereof has been transmitted to the Comptroller of the Currency, and his certificate obtained specifying the amount of such increase of capital stock, with his approval thereof, and that it has been duly paid in as part of the capital of such association. 1886, C. 73, Stat. L., 18. INCREASE OF CAPITAL STOCK. ACT MAY 1, 1886. Act May 1, 39. Sec. 1. That any national banking association may, sec. 1; 24 with the approval of the Comptroller of the Currency, by the vote of shareholders owning two-thirds of the stock of such association, increase its capital stock, in accordance with existing laws, to any sum approved by the said Comptroller, notwithstanding the limit fixed in its original articles of association and determined by said Comptroller; and no increase of the capital stock of any national banking association either within or beyond the limit fixed in its original articles of association shall be made except in the manner herein provided. 1864, c. 106, NOTE. Other sections of this act follow Revised Statutes 5136. REDUCTION OF CAPITAL STOCK. Act June 3, 40. Sec. 5143.-Any association formed under this Title sec. 13; 13 may, by the vote of shareholders owning two-thirds of Stat. L., 103. its capital stock, reduce its capital to any sum not below the amount required by this Title to authorize the formation of associations; but no such reduction shall be allowable which will reduce the capital of the association below the amount required for its outstanding circulation, nor shall any such reduction be made until the amount of the proposed reduction has been reported to the Comptroller of the Currency and his approval thereof obtained. RIGHT OF SHAREHOLDERS TO VOTE; PROXIES AUTHORIZED. Act June 3, 1864, c. 106, 41. Sec. 5144.-In all elections of directors, and in desec: 11; 13 ciding all questions at meetings of shareholders, each Stat. L., 102. shareholder shall be entitled to one vote on each share of stock held by him. Shareholders may vote by proxies duly authorized in writing; but no officer, clerk, teller, or book-keeper of such association shall act as proxy; and no shareholder whose liability is past due and unpaid shall be allowed to vote. NOTE.-The Circuit Court of the United States, in United States v. Barry, 36 F. R., 246, held that the words "liability past due and unpaid " referred only to unpaid subscriptions for stock. ELECTION OF DIRECTORS. 42. Sec. 5145.-The affairs of each association shall be Act June 3, 1864, C. 106, managed by not less than five directors, who shall be secs. 9, 10: 13 elected by the shareholders at a meeting to be held at any Stat. L., 102. time before the association is authorized by the Comptroller of the Currency to commence the business of banking; and afterward at meetings to be held on such day in January of each year as is specified therefor in the articles of association. The directors shall hold office for one year, and until their successors are elected and have qualified. REQUISITE QUALIFICATION OF DIRECTORS. 1864, C. 106, Act Feb. 28, L., 818, c. 1163. 43. Sec. 5146 [as amended 1905].-Every director must, Act June 3, during his whole term of service, be a citizen of the secs. 9, 10; 13 United States, and at least three fourths of the direc- Stat. L. 102, tors must have resided in the State, Territory, or District 1905; 33 Stat. in which the association is located for at least one year immediately preceding their election and must be residents therein during their continuance in office. Every director must own in his own right at least ten shares of the capital stock of the association of which he is a director, unless the capital of the bank shall not exceed twenty-five thousand dollars, in which case he must own in his own right at least five shares of such capital stock. Any director who ceases to be the owner of the required number of shares of the stock, or who becomes in any other manner disqualified, shall thereby vacate his place. OATH REQUIRED FROM DIRECTORS. c. 106, 44. Sec. 5147.-Each director, when appointed or elected,,Act June 3, shall take an oath that he will, so far as the duty devolves sec. 9; 13 on him, diligently and honestly administer the affairs of Stat. L., 102. such association, and will not knowingly violate, or willingly permit to be violated, any of the provisions of this Title, and that he is the owner in good faith, and in his own right, of the number of shares of stock required by this Title, subscribed by him, or standing in his name on the books of the association, and that the same is not hypothecated, or in any way pledged, as security for any loan or debt. Such oath, subscribed by the director making it, and certified by the officer before whom it is taken, shall be immediately transmitted to the Comptroller of the Currency, and shall be filed and preserved in his office. FILLING VACANCIES. 1864, C. 106, 45. Sec. 5148.-Any vacancy in the board shall be filled Act June 3, by appointment by the remaining directors, and any di-sec. 10; 13 rector so appointed shall hold his place until the next Stat. L., 102. election. PROCEEDINGS WHERE NO ELECTION IS HELD ON THE PROPER DAY. Act June 3, 1864, c. 106, 46. Sec. 5149.-If, from any cause, an election of directors is not made at the time appointed, the association sec. 10; 13 shall not for that cause be dissolved, but an election may Stat. L., 102. be held on any subsequent day, thirty days' notice thereof in all cases having been given in a newspaper published in the city, town, or county in which the association is located; and if no newspaper is published in such city, town, or county, such notice shall be published in a newspaper published nearest thereto. If the articles of association do not fix the day on which the election shall be held, or if no election is held on the day fixed, the day for the election shall be designated by the board of directors in their by-laws, or otherwise; or if the directors fail to fix the day, shareholders representing two-thirds of the shares may do so. ELECTION OF PRESIDENT OF THE BOARD. Act June 3, 47. Sec. 5150.-One of the directors, to be chosen by the 1864, c. 106, sec. 9; 13 board, shall be the president of the board. Stat. L., 102. 1864, C. 106, INDIVIDUAL LIABILITY OF SHAREHOLDERS. Act June 3, 48. Sec. 5151.-The shareholders of every national sec. 12; 13 banking association shall be held individually responsiStat. L., 102. ble, equally and ratably, and not one for another, for all contracts, debts, and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares; except that shareholders of any banking association now existing under State laws, having not less than five millions of dollars of capital actually paid in, and a surplus of twenty per centum on hand, both to be determined by the Comptroller of the Currency, shall be liable only to the amount invested in their shares; and such surplus of twenty per centum shall be kept undiminished, and be in addition to the surplus provided for in this Title; and if at any time there is a deficiency in such surplus of twenty per centum, such association shall not pay any dividends to its shareholders until the deficiency is made good; and in case of such deficiency, the Comptroller of the Currency may compel the association to close its business and wind up its affairs under the provisions of chapter four of this Title. Act June 3, 1864, c. 106, NOTE.-See act of June 30, 1876, following section 5238, Revised Statutes, for enforcement of liability prescribed by this section in cases of voluntary liquidation. EXECUTORS, TRUSTEES, ETC., NOT PERSONALLY LIABLE. 49. Sec. 5152.-Persons holding stock as executors, adsec. 63; 13 ministrators, guardians, or trustees shall not be personStat. L., 118. ally subject to any liabilities as stockholders; but the estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward, or person interested in such trust-funds would be, if living and competent to act and hold the stock in his own name. a Chapter 5 of this compilation. NATIONAL BANKING ASSOCIATIONS TO BE DEPOSITA RIES OF PUBLIC MONEYS. 1864, c. 106, Stat. L., 113. Act Mar. 4, 50. Sec. 5153 [as amended 1907].-All national banking 18ct June 8 associations, designated for that purpose by the Secre-sec. 45; 13 tary of the Treasury, shall be depositaries of publicct Mar. 3, money, under such regulations as may be prescribed by 1901, c. 871, sec. 1; 31 the Secretary; and they may also be employed as finan- Stat. L. 1448. cial agents of the Government; and they shall perform 1907; 34 Stat. all such reasonable duties, as depositaries of public money L., 1290. and financial agents of the Government, as may be required of them. The Secretary of the Treasury shall require the associations thus designated to give satisfactory security, by the deposit of United States bonds and otherwise, for the safe-keeping and prompt payment of the public money deposited with them, and for the faithful performance of their duties as financial agents of the Government: Provided, That the Secretary shall, on or before the first of January of each year, make a public statement of the securities required during that year for such deposits. And every association so designated as receiver or depositary of the public money shall take and receive at par all of the national currency bills, by whatever association issued, which have been paid into the Government for internal revenue, or for loans or stocks: Provided, That the Secretary of the Treasury shall distribute the deposits herein provided for, as far as practicable, equitably between the different States and sections. NOTE. For other provisions relating to duties and liabilities of depositaries see following sections of the Revised Statutes of the United States: Sec. 3640. Transfer of moneys from depositaries to Treasury authorized. Sec. 3641. Transfer of postal deposits. Sec. 3642. Accounts of postal deposits. Sec. 3643. Entry of each deposit, transfer, and payment. Sec. 3644. Public moneys in Treasury and depositories subject to draft of Treasurer. Sec. 3645. Regulations for presentment of drafts. Sec. 3646. Duplicates for lost or stolen checks authorized. Sec. 3647. Duplicate check when officer who issued is dead. Sec. 3648. Advances of public moneys prohibited. Sec. 3649. Examination of depositaries. See also secs. 3620, 3847, 4046, 5488, and 5497, page 88, post. INTEREST ON PUBLIC DEPOSITS. ACT MAY 30, 1908. 51. Sec. 15.-That all national banking associations designated as regular depositaries of public money shall pay upon all special and additional deposits made by the Secretary of the Treasury in such depositaries, and all such associations designated as temporary depositaries of public money shall pay upon all sums of public money deposited in such associations interest at such rate as the Secretary of the Treasury may prescribe, not less, however, than one per centum per annum upon the average monthly amount of such deposits: Provided, however, That nothing contained in this Act shall be construed to Act May 30, 1908, sec. 15. |