Third. Such as shall be conveyed to it in good faith in satisfaction of debts previously contracted in the course of its dealings.

Fourth. Such as it shall purchase at sales under judg ments, decrees or mortgages held by the association, or shall purchase to secure debts due to it; but no such association shall hold the possession of any real estate under mortgage or the title and possession of any real estate purchased to secure any debt due to it for a longer period than ten (10) years.

§ 6. CAPITAL REQUIRED.] No association shall be organized under this title in towns containing five hundred inhabitants or less, with a less capital than five thousand dollars, in towns of over five hundred and not over one thousand inhabitants with a less capital than ten thousand dollars, in towns of over two thousand inhabitants the capital shall not be less than twenty-five thousand dollars. At least 50 per cent of the capital stock of every association shall be paid in before it shall be authorized to commence business, the balance of which shall be paid in installments of not less than 10 per cent at the end of each succeeding six months from the time it is authorized to commence business. The payment of each installment shall be certified to the secretary of state under oath by the president or cashier of the association. Provided, That in towns of less than five hundred inhabitants any resident individual may, upon application to the secretary of state, be granted a certificate authorizing him to engage in the business of banking with a less capital than five thousand [dollars] by filing in the office of the secretary of state a good and sufficient bond to the State of South Dakota in the penal sum of ten thousand dollars, conditioned to secure depositors and creditors against loss, to be signed by at least two sureties, said bond to be approved by the secretary of state. Upon the filing and approval of said bond and issuing of said certificate by the secretary of state, said applicant shall become amenable to the provisions of this act.

§ 7. ORGANIZATION CERTIFICATE TO BE PUBLISHED.] The association shall cause the organization certificate and the official authorization of the secretary of state issued under this act to be published in some newspaper in the city or county where the association or bank is located for at least four (4) consecutive weeks next after the issuing thereof.

§ 8. ARTICLES USED IN EVIDENCE.] A certified copy of the articles of incorporation may be used in evidence in all courts for or against such bank, or any person for or against whom such evidence is neccessary, whether on civil or criminal trial.

§ 9. DELINQUENT STOCK- -HOW SOLD.] Whenever any shareholder or his assignee fails to pay any installment on the stock, when the same is required to be paid, the directors of

such association may sell the stock of the delinquent shareholder or as much thereof as is necessary to satisfy the debt, at public auction, after having given three weeks previous notice thereof in a newspaper published and in general circulation in the city or county where the association is located to any person who will pay the highest price therefore, to be not less than the amount due thereon, with the expenses of the 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 the 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 (6) months from the time of such forfeiture.

§ 10. CAPITAL STOCK-LIABILITY OF SHAREHOLDERS.] The capital stock of each association shall be divided into shares of one hundred ($100) dollars each and be deemed personal prop erty, and transferable on the books of the association in such manner as may be prescribed by the by-laws or articles of such association; every person becoming a shareholder by such transfer shall, in proportion to his shares succeed to all rights and liabilities of the prior holders of such shares, and no change shall be made in the articles of association by which the rights, remedies or security of the existing creditors of the association shall be impaired.

§ 11. INCREASE OR DECREASE OF CAPITAL STOCK.] Any association formed under this title may by its articles of association, provide for an increase of its capital stock from time to time as may be deemed expedient, subject to the rules and limitations of this title, but no increase of capital shall be valid until the whole amount shall be paid in, in cash, and such pay ment certified under oath by the president or cashier of such association, to the secretary of state, who shall give his certificate that the provisions of this section have been complied with, and specifying therein the amount of such increase of capital stock with his approval thereof, and that it has been duly paid in as a part of the capital thereof; any association formed under this title may by vote of its shareholders, owning two-thirds of its stock, reduce its capital to any sum, not below the amount required by this title to authorize the formation of association, but no such reduction shall be made until the amount of the proposed reduction is reported to the secretary of state, and his approval thereof obtained in writing, and no such reduction shall be construed as affecting the liability of shareholders for any debts of the association incurred prior to such reduction.

§ 12.

ASSOCIATION HOW DISSOLVED—DUTIES OF PUBLIC EXAMINER IN RELATION THERETO.] Any association organized

under the provisions of this act, may be dissolved by the circuit court of the county where its office or principal place of business is situated, upon its voluntary application for that purpose. The application must be in writing and must set forth that at a meeting of the stockholders or members called for that purpose the dissolution of the association was resolved up on by a two-thirds vote of all the stockholders or members, and that all claims and demands against the association have been satisfied and discharged. The application must be signed by a majority of the board of directors or other officers having the management of the affairs of the association, and must be verified in the same manner as a complaint in a civil action. A verified copy of the application shall be filed with the public examiner within ten (10) days after the filing of such applica tion with the circuit court. If the court is satisfied that the application is in conformity with this act it must order the ap plication to be filed, and that the clerk give not less than thirty nor more than fifty days notice of the application by publication in some newspaper published in the county, and if there are none such then by advertisement posted up in five of the principal public places in the county. At any time before the expiration of the time of publication, any person may file his objections to the application. Before the final hearing and determination of the application the public examiner shall make a thorough examination of the affairs of such association and file a certified statement of such examination with the clerk of the court of the county where such application is made, which statement shall be part of the papers in the case. After the time of publication has expired the court may, upon five days' notice to the persons who have filed objections, or without further notice if no objections have been filed, proceed to hear and determine the application, and if all the statements therein made are shown to be true, the court must declare the association dissolved. No stockholder or officer of such association shall be allowed to withdraw from such association, or surrender or dispose of his shares of stock, after the filing or making such application for dissolution, and prior to the final determination of the case. Upon the dissolution of such association by the circuit court, the clerk of said court shall forthwith notify the secretary of state of such dissolution, by sending a copy of the order of the court, and said order and notice shall be filed by the secretary of state with the original certificate of organization. The application, notices and proof of publication, objections (if any) and declaration of dissolution, constitute the judgment roll, and from the judgment an appeal may be taken in the same manner as in other actions.

§ 13. DIVIDENDS.] The directors of any association organized under this act may semi-annually declare a dividend of

so much of the net profits of the association as they shall judge expedient, but each association shall, before the declaration of a dividend, carry one-tenth part of its net profits of the preceding half year to its surplus fund until the same shall amount to twenty per cent of its capital stock.

§14. QUALIFICATION OF DIRECTOR.] Every director must own in his own right at least ten (10) shares of the capital stock of the association of which he is a director: Any director who ceases to be the owner of ten shares of the stock, or who becomes in any other manner disqualified, shall thereby vacate his place.

§ 15. CAPITAL TO REMAIN INVIOLATE—BAD DEBTS.] No association or any member thereof shall, during the time it shall continue its banking operations, withdraw, or permit to be withdrawn, either in form of dividends or otherwise any portion of its capital; if losses have at any time been sustained by such association equal [to] or exceeding its individual profits then on hand, no dividend shall be made; and no dividend shall be made by any association while it continues its banking business to any amount greater than its net profits on hand, deducting therefrom its losses and bad debts; all debts due to an association on which the interest is past due and unpaid for a period of six months, unless the same are well secured and in process of collection, shall be considered bad debts within the meaning of this section, but nothing in this section shall prevent the reduction of capital of the association under section eleven of this act.

§ 16. INTEREST.] Such association may demand and receive for loans on personal security, or for notes, bills, or other evidences of debt, discounted, such rate of interest as may be agreed upon, not exceeding the amount authorized by law to be contracted for, and it shall be lawful to receive the interest according to the ordinary usage of banking institutions.

§ 17. REPORTS-PENALTY FOR FAILURE TO MAKE.] Every association shall make at least four reports each year to the public examiner, according to the form which may be prescribed by him, verified by the oath of the president or cashier and attested by at least two of the directors; such report shall exhibit in detail and under appropriate heads the resources and liabilities of the association at the close of business on any past day by him specified, and shall be transmitted to the public examiner within seven days after the receipt of such request from him, and in the same form shall be published in a newspaper published in the city or county where such association is located, at the expense of the association. The public examiner shall also have power to call for special reports from any association whenever in his judgment the same are necessary, in order to obtain a full and complete knowledge of its condition;

every association which fails to make and transmit any report required under this section shall be subject to a penalty of two hundred dollars for each offense.

The share

$18. RESPONSIBILITY OF SHAREHOLDERS.] holders of every association organized under this title shall be individually responsible, equally and ratably, and not one for the other, for all contracts, debts and engagements of such association made or entered into to the extent of the amount of his stock therein, at the par value thereof, in addition to the amount invested in, and due on such shares.

§ 19. CERTAIN LOANS PROHIBITED.] No association shall make any loans or discounts on the security of the shares of its own stock, nor 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 months be sold or disposed of at public or private sale.

§ 20. ASSETS AND LIABILITIES—RESERVE.] Each association shall at all times have on hand in available funds an amount equal to twenty (20) per cent of its deposits, one half of which may consist of balances due to the association from good solvent banks, and one-half shall consist of cash on hand. Whenever the available funds shall be below twenty (20) per cent of its deposits such association shall not increase its liabilities by making any new loans or discounts, otherwise than by discounting or purchasing bills of exchange payable at sight, nor make any dividends of its profits until the required proportion between the aggregate amount of deposits and its lawful money reserve has been restored. And the public examiner may notify any association whose lawful money reserves shall be below the amount above required to be kept on hand, to make good such reserve, and if such association shall fail so to do for a period of thirty days after such notice, the public examiner may impose a penalty of not less than one hundred (100) dollars, nor more than five hundred, which shall be collected in the same manner as other penalties prescribed in this act. § 21. FINES AND PENALTIES-HOW RECEIVED.] All fines and penalties heretofore provided for, to which any association organized under this act may become subject to, shall be recovered on complaint of the public examiner, before any court having competent jurisdiction, and all fines and penalties so recovered shall be paid into the state treasury.

§ 22. LOANS AND DISCOUNTS.] The total liability of [to] any association of any person or company, corporation or firm, for money borrowed, including in the liabilities of a company or firm, the liabilities of the several members thereof, shall not at any time exceed fifteen (15) per cent of the capital stock of such association, actually paid in, but the discount of bills of