Chap. 146.—An ACT to amend and re-enact sections 2158 and 2162 of the Code
of Virginia, as heretofore amended, relating to public moneys and State
depositories. [S B 192]

Approved March 11, 1936

1. Be it enacted by the General Assembly of Virginia, That sections
twenty-one hundred and fifty-eight and twenty-one hundred and sixty-
two of the Code of Virginia, as heretofore 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, in accordance with the terms of deposit agreement, what-
ever 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 one per centum per
annum on time deposits for thirty days or sixty days; two per centum
per annum on time deposits for ninety days; two and one-half per
centum per annum on time deposits for six months. The State Finance
Board may, however, in its discretion from time to time, contract for
higher rates of interest to be paid upon State deposits but in no case
to be higher than the maximum rates of interest which may be paid
by banks as prescribed by the board of governors of the Federal Re-
serve System under authority of an Act of the Congress of the United
States, approved August twenty-third, nineteen hundred and thirty-
five, known as the Banking Act of nineteen hundred and thirty-five, or
amendments thereto. Should the said board of governors of the Fed-
eral Reserve System at any time fix the maximum rates of interest at
which member banks may pay interest on time deposits lower than
the minimum rates at which interest shall be paid on State deposits
herein prescribed, said maximum rates fixed by the said board of gov-
ernors of the Federal Reserve System shall become the minimum rates
at which interest shall be paid on State deposits.

The State Treasurer is authorized with the consent and approval of
the State Finance Board, to arrange for and make State deposits in
such amounts and for such time as in his judgment the condition of
the treasury permits, provided however that no State deposit shall be
made for a period in excess of six months.
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 be at all times 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 pursuant to an Act of Congress of
the United States, approved June sixteenth, nineteen hundred and
thirty-three, and known as the banking act of nineteen hundred and
thirty-three, and amendments thereto.

Any such bank, however, may deposit with the Treasurer of the
Commonwealth of Virginia, in lieu of such bond, registered or coupon
bonds of 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 stat-
utes 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 de-
posit, or bonds of the Home Owners’ Loan Corporation, and of any
other corporation or agency created pursuant to an Act or Acts of the
Congress of the United States, provided the said bonds are guaranteed
by the Federal Government as to both principal and interest and the
evidence of such guarantee appears on the face of said bonds; said
bonds and notes to be taken at the market value on the date of deposit,
to be held upon the same condition and trust for the protection and
indemnity of, and for the payment of interest to, 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 and notes 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 deprecia-
tion or reduction in value of said securities. The State shall be re-
sponsible 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 exec-
uted 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 securities until re-

leased by the Treasurer of Virginia, or his duly authorized deputy,
upon the same condition and trust for the protection and indemnity
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 him-
self 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.

Section 2162. As soon as the State depositories, or any of them,
have given the bonds required of them under the preceding sections,
and such bonds have been approved and accepted by the finance board,
all public moneys on deposit with other depositories shall be trans-
ferred to such of the State depositories as have given bonds (which
have been approved and accepted as aforesaid), or to any or either of
them. All transfers of public moneys, under the provisions of this
or the preceding sections shall be made upon draft drawn by the
treasurer or his duly authorized deputies, and so drawn that the money
shall not go into the hands of the treasurer; but the transfer shall be
made in the mode selected by the depository receiving the money and
at the risk and expense of said depository.

2. This act shall be in force on and after July first, nineteen hun-
dred and thirty-six.