Chap. 768.—An ACT to amend and re-enact an act approved M
entitled an act to provide for state banks of circulati

Approved March 6, 1900.

1. Be it enacted by the general assembly of Virginia, T
tions for carrying on the business of banking under this t
formed by any number of natural persons, not less in any ca
They shall enter into articles of association, which shall spe
eral terms the object for which the association is formed, ar
tain any other provisions, not inconsistent with law, which
tion may see fit to adopt for the regulation of its business a
duct of its affairs. These articles shall be signed by the per:
to form the association, and a copy of them shall be forwa
secretary of the commonwealth, to be filed and preserved in

2. The persons uniting to form such an association shall,
hands, make an organization certificate which shall specific:

First. The name assumed by such association, which na
subject to the approval of the secretary of the commonwealt.

Second. The place where its operations of discount and di
be carried on, designating the village, town, or city and coun
said bank is to be located.

Third. The amount of capital stock and the number of
which the same is to be divided.

Fourth. The names and places of residences of the share
the number of shares held by each of them.

Fifth. The fact that the certificate is made to enable suc
avail themselves of the authority to organize a state bank
act.

3. The organization certificate shall be acknowledged bef
of some court of record, notary public, or justice of the peac
be, together with the acknowledgment thereof, transmitted
retary of the commonwealth, who shall record and carefully -
same in his office.

4. Upon duly making and filing articles of association and :
tion certificate, the association shall become, as from the
execution of its organization certificate, a body corporate, a
and in the name designated in the organization certificate, i
power:

First. To adopt and use a corporate seal.

Second. To have succession for the period of twenty ye:
organization, unless it is sooner dissolved according to the p
its articles of association, or by the act of its shareholders ¢
thirds of its stock, or unless its franchise becomes forfeited by some
violation of law.

Third. To make contracts.

Fourth. To sue and be sued, complain and defend, in any court of
law and equity, as fully as natural persons.

Fifth. To elect or appoint directors, and, by its board of directors,
to appoint a president, vice-president, cashier, and other officers, define
their duties, require bonds of them and fix the penalty thereof, dismiss
such officers, or any of them, at pleasure, and appoint others to fill their
places.

Sixth. To prescribe, by its board of directors, by-laws not inconsistent
with law, regulating the manner in which its stock shall be transferred,
its directors elected or appointed, its officers appointed, its property
transferred, its general business conducted, and its privileges granted
to it by law exercised and enjoyed.

Seventh. To exercise, by its board of directors or duly authorized
officers or agents, subject to law, all such incidental powers as shall be
necessary to carry on the business of banking by discounting and ne-
gotiating promissory notes, drafts, bills of exchange, and other evidences
of debt; by receiving deposits; by buying and selling exchange, coin, and
bullion; by loaning money on personal or real estate security, and bv
obtaining, issuing, and circulating notes, according to the provisions of
this act.

But no association shall transact any business, except such as is inci-
dental and necessarily preliminary to its organization, until it has been
authorized by the secretary of the commonwealth to commence the busi-
ness of banking.

5. A state banking association may purchase, hold, and convey real
estate for the following purposes, and for no other:

First. Such as shall be necessary for its immediate accommodation in
the transaction of its business.

Second. Such as shall be mortgaged to it in good faith by way of
security for debts.

Third. Such as shall be conveyed to it in satisfaction of debts con-
tracted in the course of its dealings.

Fourth. Such as it shall purchase at sale under judgments, decrees,
mortgages, or deeds of trust 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 deed of trust, or the title and
possession of any real estate purchased to secure any debts due td it for
a longer period than five years; and no such association shall loan on
any real estate more than one-fourth of its assessed value, nor for a
longer period than ninety days.

6. No association shall be organized under this act in any village or
town with a less capital than ten thousand dollars, nor in any city with
a less capital than fifty thousand dollars.

%. The capital stock of each association shall be divided into shares of
one hundred dollars each, and be deemed personal property, and trans-
ferable on the books of the association in such manner as may be pre-
scribed in the by-laws or articles of association. Every person becoming
a shareholder by such transfer shall, in proportion to his shares, succeed
to all the rights and liabilities of the prior holder of such shares, and nc
changes 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. .

8. At least fifty per centum of the capital stock of every association
shall be paid in before it shall be authorized to commence business; and
the remainder of the capital stock of such association shall be paid in
instalments of at least ten per centum each on the whole amount of the
capital, as frequently as one instalment at the end of each succceding
month from the time it shall be authorized by the secretary of the com-
monwealth to commence business, and the payment of each instalment
shall be certified to the secretary of the commonwealth, under oath, by
the president or cashier of the association.

9. Whenever any shareholder or his assignee fails to pay any instal-
ment on the stock when the same is required by the preceding section to
be paid, the 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 circu-
lation 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 pub-
lished nearest thereto, to any person who will pay the highest price
therefor, to be not less than the amount due thereon, with the expenses
of advertisement and sale, and the excess, if anv, shall he 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 adver-
tisement 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, as provided by section thirty of this act, to close up the
business of the association.

10. Any association formed under this act may, by its articles of asso-
ciation, provide for an increase of its capital from time to time, as may
be deemed expedient, subject to the Jimitations of this act. But the
maximum of such increase to be provided in the articles of association
shall be determined by the secretary of the commonwealth, 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 secretary of
the commonwealth, 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.

11. Any association formed under this act may, by the vote of share-
holders owning two-thirds of its capital stock, reduce its capital to any
sum not below the amount required by this act to authorize the forma-
tion of associations; but no reduction shall be allowed which will reduce
the capital of the association below the amount required for its outstand-
ing circulation, nor shall any such reduction be made until the amount
of the proposed reduction has been reported to the secretary of the
commonwealth, and his approval thereof obtained.

12. In all elections of directors, and in deciding all questions at meet-
ings of shareholders, each 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 bookkeeper of such
association shall act as proxy; and no shareholder whose liability is past
due and unpaid shall be allowed to vote.

13. The affairs of each association shall be managed by not less than
five dircctors, who shall be elected by the shareholders at a meeting
to be held at any time before the association is authorized by the sec-
retary of the commonwealth to commence the business of banking, and
afterwards 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 quali-
fied.

14. Every director must, during his whole term of service, be a citizen
of Virginia, and the owner of at least ten shares of the capital stock of
the association, in his own right, 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. Each director, when appointed or elected, shall take an oath that
he will, so far as the duty devolves on him, diligently and honestly
administer the affairs of such association, and will not knowingly violate
or willingly permit to be violated any of the provisions of this act, and
that he is the owner, in good faith and in his own right, of the number
of shares of stock required by this act, subscribed bv 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
oflicer before whom it is taken, shall be immediately transmitted to the
secretary of the commonwealth, and shall be filed and preserved in his
office.

16. Any vacancy in the board shall be filled by appointment by the
remaining directors, and any director so appointed shall hold his place
until the next election.

17. Jf from anv cause an election of directors is not made at the
time appointed, the association shall not for that cause be dissolved,
but an election may 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 news-
paper 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 dav 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 capital stock, may do so.

18. One of the directors to be chosen by the board of directors, shall
be president of the hoard.

19. Persons holding stock as executors, administrators, guardians, o1
trustees, shall not be personally subject to any liabilities as stockholders;
but the estates and funds in their hands shall be lable in like manner,
and to the same extent, as the testator, intestate, ward, or person inter-
ested in such trust funds would be, if living and competent to act, and
hold the stock in his own name.

20. Whenever a certificate is transmitted to the secretary of the com-
monwealth, certifying that the whole amount of capital stock has been
paid in, the secretary of the commonwealth shall examine into the con-
dition of such association, ascertain especially the amount of money paid
in on account of its capital, the name and place of residence of each
of its directors, and the amount of the capital stock of which each is
owner in good faith, and generally whether such association has com-
plied with all the provisions of this act to entitle it to engage in the
business of banking, and shall cause to be made and attested by the
oaths of a majority of the directors and by the president or cashier of
the association a statement of all the facts necessary to enable the sec-
retary of the commonwealth to determine whether the association is
lawfully entitled to commence the business of banking.

21. If, upon careful examination of the facts so reported, and of
any other facts which may come to the knowledge of the secretary of the
commonwealth, it appears that such association is lawfully entitled
to commence the business of banking, the secretary of the common-
wealth shall give to such association a certificate, under his hand and
official seal, that such association has complicd with all the provisions
required to be complied with before commencing the business of banking,
and that such association is authorized to commence such business. But
the secretary of the commonwealth may withhold from an association
his certificate authorizing the commencement of business whenever he
has reason to suppose that the shareholders have formed the same for any
other than the legitimate objects contemplated by this act.

22. The association shall cause the certificates issued under the pre-
ceding section to be published for thirty days next after the issuing
thereof, in some newspaper printed in the city or county where the asso-
ciation is located; or if no newspaper is published in such city or county,
then, in the newspaper published nearest thereto.

23. Upon complying with this act, the association making the same
shall be entitled to receive from the treasurer of Virginia circulating
notes of different denominations in blank, registered and countersigned,
as hereinafter provided.

24. In order to furnish suitable notes for circulation, the treasurer of
Virginia shall cause plates and dies to be engraved, in the best manner,
to guard against counterfeiting and fraudulent alterations. and shall
have printed therefrom and numbered such quantity of circulating notes,
in blank, of the denominations of five dollars, ten dollars, twenty dollars,
fifty dollars, and one hundred dollars, as may be required to supply
the associations entitled to receive the same. Such notes shall express
upon their face the promise of the association receiving the same tc
pay on demand, attested by the signatures of the president or vice-presi-
dent and cashier; and shall bear such devices and such other statements.
and shall be in such form as the governor of Virginia shall by regulation

direct.
25. The plates and special dies to be procured by the treasurer for the
printing of such circulating notes, shall remain under his control anc
direction, and the expenses necessarily incurred in executing the law:
respecting the procuring of such notes, plates, and dies, shall be borne
by each association for whose benefit the same are procured.

26. The treasurer shall cause to be examined each year the plates
dies, and other material from which the said circulating notes are printed
and file in his office annually a correct list of the same. Such material:
as shall have been used in printing the notes of the association which
are in liquidation or have closed business, shall be destroyed, under such
regulations as shall be prescribed by the governor.

27. All circulating notes issued under the authority of this act shall
be redeemable in lawful currency of the United States, on demand, at
the place of business of the association issuing the same, during banking
hours.

28. After any association receiving circulating notes under this act
has caused its promise to pay such notes on demand to be signed by the
president or vice-president and cashier thereof, in such manner as to
make them obligatory promissory notes, payable on demand at its place
of business, such association may issue and circulate the same as money.

29. All laws of this state relating to the banks of discount and deposit,
and not inconsistent with thé provisions of this act, shall be applicable
to the banks created under this act.

30. All banks organized under the provisions of this act, shall always
have on hand as a reserve fund and to protect its circulation, which shall
not exceed the amount of the capital and support of the bank, at least
twenty-five per centum of its circulation in gold, silver, United States
treasury or national bank notes, and whenever from its reports it appears
that any bank has less than such reserve, or from complaint of any per-
son in interest such fact, or any other fact rendering it proper, appears,
the attorney-general of Virginia shall apply to the circuit judge of the
county or corporation in which such bank may be located for a receiver,
who shall take charge of its assets and administer same, and all proceed-
ings shall be the same, mutatis mutandis, as those under United States
statutes, relating to insolvent banks, organized under the laws of the
United States.

31. This act shall be in force from its passage.