Chap. 337.—An ACT to amend and re-enact sections 4100, 4104, 4105, 4109, 4116.
4117 and 4118 of the Code of Virginia, of 1919. [H B 405]

Approved March 23, 1922.

1. Be it enacted by the general assembly of Virginia, That sec-
tions forty-one hundred, forty-one hundred and four, forty-one hun-
dred and five, forty-one hundred and nine, forty-one hundred and
thirteen, forty-one hundred and sixteen, forty-one hundred and seven-
teen, forty-one hundred and eighteen of the Code of Virginia of nine-
teen hundred and nineteen, be amended and re-enacted ‘so as to read
as follows: )

Sec. 4100. What part of capital stock to be paid before com-
mencing business; when residue to be paid; stock to be sold at not
less than par; no commission or fees to be paid for sale of stock;
individual liability of stockholders—Hereafter the subscriptions to
the capital stock of any bank, incorporated under the laws of Vir-
ginia, shall be paid in money at not less than par, and at least the
minimum amount of capital prescribed by the charter shall be sub-
scribed, and at least fifty per centum of the subscription of each sub-
scriber shall actually be paid in in cash before such bank shall be
authorized to begin business, and the remainder of the capital stock
of such bank shall be paid in monthly installments of at least ten
per centum of the whole capital, payable at the end of each succeed-
ing month from the date of the certificate of the State corporation
commission authorizing such bank to begin business. The payment
of each monthly installment shall be certified to the chief examiner
of banks, under oath, by the president or cashier of such bank. But
no bank shall be authorized to begin business until at least fifteen
thousand dollars of its capital stock has been actually paid in money,
and no trust company shall be authorized to begin business until
the provisions of section forty-one hundred and forty-six shall have
been complied with. Subscriptions to the capital stock of every
bank, heretofore or hereafter incorporated under the laws of this
State, shall be paid in money and accounted for to the bank in the
full amount paid for the same. No commissions, fees, brokerage, or
other compensation of any kind, by whatever name it may be called,
either directly or indirectly, shall be paid to any person, persons, part-
nership, association or corporation for the sale of such stock of any
bank or trust company hereafter chartered. The State corporation
commission shall refuse to issue a certificate of authority to any bank
to commence business if commissions, fees, brokerage, or other com-
pensation, by whatever name it may be called, either directly or in-
directly, have been paid or contracted to be paid by any bank, or by
any one in its behalf, to any person, persons, partnership, association
or corporation for the sale of stock in such bank. If the provisions
of this section are violated by any bank, heretofore or hereafter in-
corporated under the laws of this State it shall be liable to a fine
of one thousand dollars, to be imposed and judgment entered there-
for by the State corporation commission, and enforced by its process.

sec. 4104. Limitation to amount invested in bank building, furni-
962 ACTS OF ASSEMBLY. [vA

ture and fixtures.—It shall hereafter be unlawful for any bank or
trust company incorporated under the laws of this State, to invest
in its bank building and premises, including its furniture and fixtures,
an amount greater than fifty per centum of its paid-in capital stock
undiminished by losses. For any violation of this section the direc-
tors of the offending corporation shall individually be responsible.

Sec. 4105. Not to begin business before obtaining certificate from
State corporation commission; publication of certificate; prescribing
prorate fees in certain cases——Before any bank shall begin business
it shall obtain from the State corporation commission a certificate
of authority authorizing it so to do; and prior to the issuance of
such certificate, the State corporation commission, through its chief
examiner of banks, or one of his assistants, shall ascertain that all
of the provisions of law have been complied with, that the required
amount of capital stock has actually been subscribed and paid in
cash, and that the oaths of all of its directors have been taken and
filed in accordance with the provisions of section forty-one hundred
and seventeen of the Code of Virginia. The bank within ten days
after the receipt of the certificate from the State corporation com-
mission shall cause the same to be published in some newspaper
printed in the county or city where such bank is located, once each
week for two successive weeks, or if no newspaper is published in
said county or city, then said publication shall be made at the nearest
place at which a newspaper is published. Proof of such publication
shall be filed with the State corporation commission. For any viola-
tion of this section such bank shall be subject to a fine of not less
than twenty-five dollars nor more than one hundred dollars per day
for each day’s violation, said fine to be imposed and judgment entered
by the State corporation commission, and enforced by its process.
Every bank authorized to begin business after the first day of July
and before the thirty-first day of December in any year shall pay
the full amount of fees prescribed in section forty-one hundred and
twenty-two; and every bank authorized to begin business after the
first day of January and before the thirtieth day of June ot any year
shall pay one-half of the fees prescribed by section forty-one hundred
and twenty-two. Such fees shall be based on the total resources of
such bank at its first examination after it has been authorized to
begin business, and at that time collected by the chief examiner of
banks and paid into the treasury as other funds arising under the
provisions of this chapter.

Sec. 4109. The election of president ; how often directors to meet.
—The directors of every bank, as soon as may be after their first
election, and after every annual election of directors, shall elect from
their own body a president, who shall act until his successor is elected
or appointed. The directors shall elect or appoint, as the case may
be, such other officer or officers, clerk or clerks, as may.be prescribed
by the by-laws or which in the judgment of the directors may be
neecssary for the proper conduct of the business of the bank. The
board of directors shall require bonds from all of the active officials
and employees of the bank. The surety on every bond shall be some
good, solvent bonding or‘surety company authorized to transact busi-
ness in Virginia, and the penalty of any such bond shall be increased
whenever in the opinion of the State corporation commission it 1s
deemed necessary for the protection of the public interest. The board
of directors of every bank:shall hold meetings at least once in each
calendar month, at which meeting a majority of the whole board
shall be necessary for the lawful transaction of business, except that
the stockholders, by by-law may fix any number not less than five
as quorum.

Sec. 4113. How banks may use their deposits and other funds.-—
Every bank shall have power to use money it may receive on deposit,
and its other funds in the manner prescribed in section forty-one
hundred and eleven; provided, however, that every such bank shall
at all times maintain a reserve of at least ten per centum of its de-
mand deposits and at least three per centum of its time deposits.
Reserve shall consist of actual cash on hand and balances payable
on detand, due from other approved solvent banks. The term “de-
mand deposits” shall mean all deposits the payment of which can be
legally required under thirty days. The term “time deposits” shall
mean all deposits the payment of which cannot be legally required
less than thirty days and represented by a certificate of deposit which
so states or by a pass book issued to the customer in which the notice
required for withdrawal is printed, written or stamped in such pass
book.

Sec. 4116. Directors must be stockholders; shares required to
qualify.—Every director of a bank shall be the owner in his own
name and have in his personal possession or control shares of stock
in the bank of which he is a director, having a par value of not less
than one hundred dollars, which must be unpledged and unencum-
bered at the time of his becoming a director and during the whole
of his term as such. Any director violating the provisions of this
section shall immediately vacate his office and the remaining direc-
tors shall proceed forthwith to fill such vacancy as provided in section
forty-one hundred and eighteen.

Sec. 4117. Oaths of directors—Every director of a bank incorpo-
rated under the laws of this State shall, within sixty days after his
election, take and subscribe to an oath that he will diligently and
honestly perform his duties as a director, and that he is the owner
and has in his personal possession or control, standing in his own
name on the books of the bank, unpledged and unencumbered in any
way, shares of stock of the bank of which he 1s a director aggregat-
ing not les than one hundred dollars; and in case of re-election or
re-appointment that during the whole of his immediate previous term
as a director such stock was not at any time pledged or in any other
manner encumbered or hypothecated to secure a loan. Such oath
subscribed to by such director, certified by the officer before whom
it 1s taken shall be transmitted by the cashier of said bank to the
chief examiner of banks. Any director who fails for a period of
sixty days after his election or appointment to take the oath required
by this section shall automatically forfeit dis office and the remain-
ing directors shall appoint some qualified stockholder to fill his place
and, stead. , ,

Sec. 4118. The election of directors ; vacancies ; how filleqd.—The
directors shall be elected at the annual meeting of the stockholers,
and all directors shall hold office for the term prescribed in the certif-
cate of incorporation, or by-laws, and shall remain in the office until
their successors are elected and qualified, subject to the provisions
of section forty-one hundred and sixteen. Any vacancy in the office
of director shall .be filled by appointment by the remaining directors.
and any director so appointed shall hold office until next election
unless sooner removed for cause or his office becomes vacant under
the provisions of this chapter; provided, however, that if the by-
laws of any bank shall provide for a greater number of directors
than the number of those elected at the annual meeting of the stock-
holders, the board shall have the right or privilege to increase the
number of directors to the maximum number prescribed in such by-
laws. The directors so elected by the board to hold office until the
next annual meeting or until their successors are elected and quali-
fied subject to the provisions of sections forty-one hundred and. six-
teen and forty-one hundred and seventeen.