Chap. 24.—An ACT to amend and re-enact section 2158 of the Code of Virginia,
as heretofore amended, relating to security to be given by depositories of
State money. [H. B. 40]

Approved September 7, 1933

I. Be it enacted by the General Assembly of Virginia, That section
twenty-one hundred and fifty-eight of the Code of Virginia, as hereto-
fore amended, be amended and re-enacted so as to read as follows:

Section 2158. No money shall be deposited in either of said banks
until it shall have secured some person other than the bank itself in
its behalf to enter into a bond, approved and accepted by the finance
board, with condition faithfully to account for and pay over when and
as required whatever amount may, at the time such bond is given, be
on deposit in said bank to the credit of the Commonwealth, and such
other sums as may thereafter be deposited in said bank on behalf of
the Commonwealth, and for the faithful discharge by said bank of all
duties and obligations pertaining to it as such depository, and with the
further condition to pay the State interest at the rate of not less than
two per centum per annum on daily balances and with the rate of two
and one-half per centum per annum to be again restored at the end
of the biennium ending June thirtieth, nineteen hundred and thirty-four.
Every such bank shall give as security on its bond, some guaranty or
surety company doing business in this State.

The penalty of any such bond, or the amount of the securities which
may be deposited in lieu thereof, as hereinafter provided for, shall be
at least five thousand dollars and must at all times be equal in amount
to the amount of money of the Commonwealth that is on deposit in
any such designated State depository, less such amount as shall be
insured, by evidence satisfactory to the State Treasurer, by the Federal
Deposit Insurance Corporation, a corporation created by an act of the
Congress of the United States, approved June sixteenth, nineteen hun-
dred and thirty-three, and known as the banking act of nineteen hun-
dred and thirty-three.

Any such bank, however, may deposit with the Treasurer of the
State, in lieu of such bond, registered or coupon bonds ot the State of
Virginia or State highway certificates, registered or coupon bonds of
any municipality, county or sub-division thereof, of the Commonwealth
of Virginia, issued in compliance with the statutes authorizing same,
or registered or coupon bonds of the United States, or interest-bearing
United States treasury notes registered in the case of registered bonds
in the name of the bank making such deposit; or bonds of the Home
Owners’ Loan Corporation, a corporation created pursuant to an act
of the Congress of the United States, approved June thirteenth, nine-
teen hundred and thirty-three, said bonds to be taken at ninety per
centum of the market value thereof on date of deposit, and not to
exceed fifty per centum of the security required, to be held upon the
same condition and trust for the protection and indemnity of the State,
stipulated above in relation to the bond to be given hereunder; and
shall at the same time deliver to the Treasurer a power of attorney
authorizing him to transfer said bonds or any part thereof, for the
purpose of paying any of the liabilities provided for in this title. The
Treasurer shall, in the month of December in each year examine all
securities so deposited with him or held as hereinafter provided for
the purpose of ascertaining whether any of them have depreciated or
been reduced in value, and forthwith require any such bank to make
good any depreciation or reduction in value of said securities. The
State shall be responsible for the safe-keeping of all bonds deposited
with the Treasurer of the State, and if said bonds or any part of them
shall be lost, destroyed, or misappropriated the State shall make good
such loss to the bank making the deposit. __

The Treasurer may in his discretion and only when he deems it an
emergency instead of requiring the actual delivery to him of the securi-
ties above enumerated, take from any such bank an order duly exe-
cuted by and under the seal of the said bank, directed to any bank
either in the State of Virginia or without the State, directing and
authorizing the latter bank to segregate such securities as shall be
designated in the said order and belonging to the former bank, from
other securities which the latter bank may hold, and to hold such securi-
ties until released by the Treasurer of Virginia, or his duly authorized
deputy, upon the same condition and trust for the protection and in-
demnity of the State stipulated above in relation to the bond to be given
under this section ; provided the Treasurer shall in each case first satisfy
himself that such securities belonging to the former bank are held by
the said latter bank, and shall secure from the said bank holding such
securities an agreement to so hold such designated securities subject
to and upon the conditions herein set forth.

The Treasurer is further authorized in his discretion and only in
cases of emergencies to accept bonds or notes of railroads or industrial
corporations which are legal investment for State and national banks
and which have not defaulted on interest payments within the past five
years, but in no case shall the bonds or notes of railroads or industrial
corporations, herein mentioned, be held, at any one time, for more than
sixty consecutive days.

2. An emergency existing, this act shall be in force from its passage.