CHaP. 246.—An ACT to amend and re-enact sections, 1168, 1169, 1170f
and 1171 of an act entitled “an act to amend and re-enact sections
1164, 1168, 1169 and 1170 and 1171 of the Code of Virginia, and to
add ‘independent sections thereto, so as to provide for the examina-
tion of banks and other similar institutions in this State, and to make
certain general provisions and for the conduct of the business of
banking, and to provide penalties for the violation of the provisions
hereof,” approved March 17, 1910.

Approved March 13, 1912.

1. Be it enacted by the general assembly of Virginia, That
sections eleven hundred and sixty-eight, eleven hundred and
sixty-nine, eleven hundred and seventy-f and eleven hundred and
seventy-one of an act entitled “an act to amend and re-enact
sections eleven hundred and sixty-four, eleven hundred and sixty-
eight, eleven hundred and sixty-nine and eleven hundred and
seventy, and eleven hundred and seventy-one of the Code of
Virginia, and to add independent sections thereto, so as to pro-
vide for the examination of banks and other similar institutions
in this State, and to make certain general provisions and for the
conduct of the business of banking, and to provide penalties for
the violation of the provisions hereof,’ approved March seven-
teenth, nineteen hundred and ten, be amended and re-enacted so
as to read as follows:

$1168. The board of directors may declare a dividend of
so much of the profits of the bank, after providing for all
expenses, losses, interest and taxes accrued, or due by said bank
as they shall judge expedient; but before any such dividend is
declared, the capital shall be paid in full, and the directors shall
cause to be laid aside, to a fund known as the surplus fund, the
entire net profits until such fund shall amount to at least ten per
centum of the capital stock. Any losses sustained by such bank
in excess of its net undivided profits may be charged to its surplus
fund; provided, that its surplus fund shall thereafter be reim-
bursed from its earnings, and no dividend shall be declared or
paid by such bank until its surplus fund shall be fully restored
to the amount required by this section. To ascertain the net
undivided profits before any dividend shall be declared, all debts
due to such bank on which interest is past due and unpaid for a
period of twelve months, (unless the same are in process of col-
lection by law), shall be deducted from the profits in addition to
all expenses, losses, interest and taxes accrued, and the balance
shall be deemed to be the net profits.

§1169. Every corporation now chartered or that hereafter
may be chartered under the laws of the State of Virginia, to do
a banking business (including savings banks, savings societies,
savings institutions and trust companies) shall make to the
corporation commission, statements of its financial condition at
such times as the national banks organized under the laws of
the United States are required to make their statements to the
comptroller of the currency, and at such other times as the State
corporation commission may deem necessary; and also publish
such statements in condensed form in some newspaper printed
in the country, city or town where such banking business is car-
ried on, or where the principal office of said company, bank,
banking institution, savings bank, savings society, savings in-
stitution or trust company is located; and if there is no such
paper published in the county, city or town, then a newspaper
published in the county, city or town nearest thereto. The state-
ment shall be made and published in accordance with forms
prescribed by the State corporation commission, certified under
oath by the president or cashier of the bank, or, if there is no
cashier, by the treasurer, and attested by at least three of its di-
rectors. It shall be the duty of the State corporation commis-
sion to call upon such companies, banks, banking institutions,
savings banks, savings societies, savings institutions and trust
companies chartered under the laws of Virginia with authority
to receive deposits for the statements hereinbefore mentioned,
and at the time prescribed, and to have prepared such forms as
may be necessary to carry out the provisions of this section.
Whenever calls for statements are made by the State corporation
commission, it shall forward to each company, bank, banking in-
stitution, savings bank, savings society, savings institution or
trust company, heretofore or hereafter incorporated under the
laws of this State with authority to receive deposits, two blank
forms, one of which, after being properly filled out and certified
as hereinbefore required, shall be returned to the State corpora-
tion commission within fifteen days next succeeding the date of
such call, and the other, filled out in like manner, shall be filed
in such bank, banking institution, savings bank, savings society,
savings institution or trust company.

The State corporation commission shall, not less than once
in each and every year, and at such other times as they may
deem necessary, cause to be examined each and every bank,
banking institution, savings bank, savings society, savings in-
stitution or trust company in this State, chartered under the
laws of Virginia, and receiving deposits, and shall cause to be
examined every such institution, whether organized under the
laws of the United States government or not, which has hereto-
fore been, or may hereafter be, designated a State depository.
Said State corporation commission shall also, upon written ap-
plication made to them by the board of directors or by the stock-
holders representing two-fifths of the amount of the capital stock
of any such bank, banking institution, savings bank, savings soci-
ety, savings institution or trust company, doing business in this
state, or whenever, in the judgment of the corporation commis-
sion, it may be necessary to do so for the protection of the pub-
lic or persons depositing or dealing with such joint stock com-
pany, bank, banking institution, savings bank, savings society,
savings institution or trust company, cause to be made a special
examination into its condition. All expenses incident to such
special examination shall be borne by the bank or institution so
examined. In making such examinations as are required by this
section, the directors, officers and employees of such joint stock
company, bank, banking institution, savings bank, savings soci-
ety, savings institution or trust company shall, upon the demand
of the person or officer so designated to make such examination,
give to such examiner full access to all the money, books, papers,
notes, bills and other evidences of debt due said institution, and
shall also disclose fully and truly all indebtedness and liability
thereof, and shall furnish him with all information which he may
deem necessary to a full investigation into the affairs of said in-
stitution, and said examiner shall have the right to examine un-
der oath any and all of the directors, officers, clerks and employ-
ees of such institution touching any matter or things pertain-
ing to said examination, and for that purpose shall have au-
thority to administer such oaths to them. No previous notice of
any examination shall be given to such institution or any of its
directors, officers or emplovees.

If upon the examination of any banking institution incor-
porated under the laws of this State, the corporation commis-
sion shall ascertain that the banking laws of this State are not
being fully observed, or that any irregularities are being prac-
ticed, or that its capital has been or is in danger of being im-
paired, the said corporation commission shall give immediate
notice thereof to the officers and directors of such institution
and demand that the impairment to the capital stock shall be
made good, or that the said irregularities shall be promptly
corrected, and upon their failure to do so, within a reasonable
time, not exceeding thirty days after such notice, may apply for
the appointmnt of a receiver to take charge of the business affairs
and assets of said institution and to wind up its affairs as here-
inafter provided.

If, however, upon the examination of any banking institution
incorporated under the laws of this State, it shall be found to be
insolvent, or it is deemed necessary by the State corporation com-
mission for the protection of the public interest, the commission
may at once close the doors of such banking institution with-
out any notice whatsoever, and the chief examiner of banks or
one of his assistants shall take charge of the books, assets and
affairs of such banking institution until the appointment of a re-
ceiver as provided by law.

If upon any such examination it shall appear to the State
corporation commission that any such joint stock company,
bank, savings bank, savings society, banking institution, savings
institution or trust company which is designated as a State de-
pository, is insolvent or unable to meet its obligation and the
legal demands upon it in the ordinary course of its business, the
corporation commission shall forthwith notify the auditor of
public accounts and the treasurer of the commonwealth, who
shall discontinue further deposits therein of State funds and
take such action as may be necessary to protect the deposits of
the State therein.

_ In any case the said State corporation commission may, and
it shall be its duty, whenever, in its judgment, it is necessary
for the protection of the interests of the State or of the deposi-
tors and creditors of any such joint stock company, bank, bank-
ing institution, savings bank, savings society, savings institu-
tion or trust company, doing a banking business in this State,
to apply to any court in this commonwealth, having jurisdic-
tion to appoint receivers of corporations, for the appointment of
a receiver to take charge of the business affairs and assets and
to wind up the affairs and business of any such joint stock com-
pany, bank, banking institution, savings bank, savings society,
savings institution or trust company so failing to comply with
the requirements of the said State corporation commission, or
so found upon examination to be insolvent or unable to meet its
obligations and the legal demands made upon it in the ordinary
course and conduct of its business, as aforesaid.

§1170-f. No person, co-partnership or corporation, except
corporations duly chartered and already conducting the business
of banking under authority of the law of this State or the United
State, or which shall hereafter be incorporated under the pro-
visions of this act, or authorized to do business under the bank-
ing laws of the United States, shall engage in the business of
banking in this State after the first day of July, nineteen hun-
dred and ten, except that nothing in this act shall prevent any
person or co-partnership or corporation from lending money on
real estate and personal security or collateral, or from guaran-
teeing the payment of bonds, notes, bills and other obligations,
or from purchasing or selling all stocks and bonds. But this
clause shall not apply to or affect any private banker or firm of
private bankers who shall have been engaged in business on the
first day of January, nineteen hundred and ten. No bank shall
be incorporated in this State with authority to do a banking
business outside of this State, nor shall any bank incorporated
under the laws of any other State be authorized to do business
in this State. Nothing in this section shall be construed to pre-
vent banking institutions chartered under the authority of the
Federal government from transacting business in Virginia.

$1171. Any officer, director or employee of any bank, bank-
ing institution, savings bank, savings society, savings institu-
tion or trust company who shall take and receive a deposit from
any person with the actual knowledge that the said bank, bank-
ing institution, savings bank, savings society, savings institu-
tion or trust company is at the time insolvent, shall be guilty
of embezzlement, and shall be punished by a fine double the
amount so received, and be confined in the penitentiary not less
than one nor more than three years, in the discretion of the jury,
for each offense. Any officer or director of any bank, banking
institution, savings bank, savings society, savings institution
or trust company who shall permit a deposit,to,be received from
any person with the actual knowledge that the said bank, bank-
ing institution, savings bank, savings society, savings institution
or trust company is, at the time insolvent, shall be guilty of em-
bezzlement, and shall be punished by a fine double the amount
so received, and be confined in jail not less than fifteen days nor
more than one year, or be confined in the penitentiary not less
than one nor more than three years, in the discretion of the jury,
for each offense. On the trial of any indictment under this sec-
tion it shall be the duty of any such bank, banking institution,
savings bank, savings society, savings institution or trust com-
pany, their agents or officers, to produce in court, on demand of
the attorney for the commonwealth, all-books and papers of such
bank, banking institution, savings bank, savings society, savings
institution or trust company, to be read as evidence on the trial
of such indictment; provided, that in determining the question
of the solvency of any bank, banking institution, savings bank,
savings society, savings institution or trust company, the capital
stock thereof shall not be considered as a liability due by it.