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SECTION 40. Any bank officer or employee who shall Check paid

when no de pay out the funds of any bank upon the check, order or posit. draft of any individual, firm, corporation or association, which has not on deposit with such bank a sum equal to such check, order or draft, shall be personally liable to such bank for the amount so paid, and such liability shall be covered by his official bond. SECTION 41. No bank, banker or bank official shall Cannot favor

depositors. give preference to any depositor or creditor by pledging the assets of the bank as collateral security: Provided, That any bank may borrow money for temporary purposes, not to exceed in amount 50 per cent of its paid up capital, and may pledge assets of the bank as collateral security therefor: Provided further, That whenever it

, shall appear that a bank is borrowing habitually for the purpose of re-loaning, the Bank Commissioner may require such bank to pay off such borrowed money. Nothing herein shall prevent any bank from rediscounting in good faith and endorsing any of its negotiable notes. SECTION 42. The capital stock of any bank doing busi- Reducing

capital stock. ness under this Act may be reduced at any time by resolution adopted by a three-fourths vote of its stockholders, at any regular meeting or at a special meeting held for that purpose, of which all stockholders shall have due notice, subject to the approval of the Bank Commissioner, which shall not be given unless such bank with such reduced capital is entirely solvent. When the Bank Commissioner has approved of any such reduction, a certificate, signed by the president and cashier of the bank setting forth the reduction of its capital and the names and amount of stock held by its stockholders, shall be filed with the Secretary of the Territory, and a duplicate copy shall be forwarded to the Bank Commissioner. Whenever the capital of any bank shall be reduced as provided in this section, every stockholder, owner or holder of any stock certificate shall surrender same for cancellation, and shall be entitled to receive a new certificate for his proportion of the new stock: Provided, That such capital

banks may

stock shall not be reduced more than is provided in Sec

tion two of this Act. Impairing SECTION 43. Whenever it shall appear that the capital capital stock, how remedied.

of any bank doing business under this Act has been impaired, the Bank Commissioner shall notify such bank to make such impairment good within sixty days, and it shall be the duty of officers and directors of any bank receiving such notice from the Bank Commissioner to immediately call a special meeting of its stockholders for the purpose of assessment of its stockholders of its stock sufficient to cover the impairment of its capital: Provided, That such bank if not insolvent may reduce its capital stock to t. xtent of the impairment, if such reduction will not place its capital below the amount required by

this Act. National

SECTION 44. Any National Bank doing business in this incorporate. Territory may incorporate as a State Bank, as provided

herein. for the organization of banks: Provided, That the Bank Commissioner may accept good assets of such National Bank worth not less than par in lieu of cash payment for the stock of such State Bank.

SECTION 45. The president and cashier of every incorList of share holders.

porated bank shall cause to be kept at all times, a full and correct list of the names and residences of all the shareholders in the bank and the number of shares held by each, in the office where it business is transacted. Such list shall be subject to the inspection of all the shareholders and creditors of the bank and the officers author. ized to assess taxes under Territorial authority, during business hours of each day in which business may be leg. ally transacted. A copy of such list on the first Monday in January of each year, verified by the oath of such president or cashier, shall be transmitted to the Bank Commissioner.

SECTION 46. Whenever any officer of the bank shall repermit in spection, pro- fuse to submit the books, paper and concerns of such cedure,

hank to the inspection of the Commissioner, or examiner appointed as aforesaid, or shall in any manner obstruct

Retusal to

ness after re

bank.

or interfere with him in the discharge of his duties, or refuse to be examined on oath touching the concerns of the bank, the Commissioner may revoke the authority of such bank to transact a banking business, and may institute proceedings for the appointment of a receiver for such bank to wind up the business.

SECTION 47. Any officer of any bank whose authority Doing busi. to transact a banking business has been revoked as here. vocation,

penalty. in provided, who shall receive or cause to be received any deposit of whatever nature after such revocation, shall be subject to the same penalty provided for persons transacting a banking busines without authority. SECTION 48. A bank may purchase, hold and convey Bealestate

by real estate for the following purposes: First, Such as shall be necessary for the convenient transaction of its business, including its furniture and fixtures, but which shall not exceed one-third of the paid in capital; Second, Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its business; Third, Such as it shall purchase at sale under judgment, decree or mortgage foreclosures urider securities held by it; but a bank shall not bid at any such sale a larger amount than enough to satisfy its debts and costs. Real estate shall be conveyed under the corporate seal of the bank, and the hands of its president or vice-president and cashier. No real estate acquired in the cases contemplated in the second and third subsections above shall be held for a longer time than five years, it must be sold at a private or public sale within thirty days thereafter.

SECTION 49. Any bank now doing business in this Real estate Territory, which owns real estate in excess of fifty per reduced. cent of its capital paid in, shall reduce its holdings, by converting same into cash or other good assets, to an amount not exceeding 50 per cent of its paid up capital, within six months after the passage of this Act.

SECTION 50. The shares of stock of an incorporated Transfer of bank shall be deemed personal property, and shall be transferred on the books of the bank in such manner as

holdings

stock.

Loans to stuckholders limited.

the by-laws thereof may direct; but no transfer of stock shall be valid against a bank or any creditor thereof so long as the registered holder thereof shall be liable as principal debtor, surety or otherwise to the bank for any debt which shall be due and unpaid, nor in such cases shall any dividend, interest or profits be paid on said stock so long as such liabilities continue, but all such dividends, interests or profits shall be retained by the bank and applied to the discharge of such liabilities; and no stock shall be transferred on the books of any banks where the registered holder thereof is in debt to the bank for any matured and unpaid obligations.

SECTION 51. It shall be unlawful for any bank to loan its funds to its stockholders on their stock as collateral security; and the total indebtedness of the stockholders of any incorporated bank shall at no time exceed 50 per cent of its paid up capital: Provided, That any bank may hold its stock as additional security or to secure a debt previously contracted.

SECTION 52. Receivers of all insolvent banks shall make reports to the Bank Gommissioner in the same manner as is required of solvent banks and shall cause such statements to be published in like manner.

SECTION 53. For the purpose of carrying into effect the provisions of this Act, the Bank Commissioner shall provide a form for the necessary blanks for such examinations and reports; and all examinations and reports received by him shall be preserved in his office.

SECTION 54. The Bank Commissioner shall receive for his services a salary of $1,800 per annum. The Legislature shall appropriate a sum not to exceed $600 for each year to cover the incidental expenses of the Bank Commissioner's office, and to defray the traveling expenses of the Commissioner. All money actually and necessarily paid out by the Commissioner for traveling and incidental expenses shall be paid to him upon the Auditor's warrant, to be issued upon sworn vouchers containing an itemized account of such expenses.

Receivers' report.

Blanks, form of

Bank com missioner, salary xnd expenses.

by county

SECTION 55. The Bank Commissioner shall make a re- Commission.

er's report to port to the Governor on or before September 1, of every

governor. even numbered year, which report shall contain the names of the owners, or the principal officers, the paid up capi. tal of each, the number of banks in the Territory, the name and location of each, the number and date of examiration and reports made of and by each, and such other information concerning the sait as may be necessary to inform the Governor of the condition ihereof.

CommissionSECTION 56. Any Commissioner who shall neglect to

er's neglect of

duty, felony. perform any duty provided for by this Act, or who shall make any false statement concerning any bank, or wito shall be guilty of any misconduct or corruption in offee, shall, upon conviction thereof, be deemed guilty of a felony, and punished in the manner provided for in Section 36 of this Act, and in addition therto shall be removed from office. SECTION 57. It shall be the duty of the Bank Commis

Proceedings

attorney. sioner to inform the county attorney of the county in which the bank is located of any violations of any of the provisions of this Act which constitute a misdemeanor or felony, by the officers, owners or employees of any bank, and upon receipt of such information the county attorney shall institute proceedings to enforce the provisions of this Act. SECTION 58. Every officer or employee of a bank re. False oath,

perjury. quired by this Act to take an oath, or affirmation, who shall wilfully swear or affirm falsely shall be deemed guilty of perjury, and, upon conviction thereof, shall be punished as provided by the laws of this Territory in case of perjury.

SECTION 59. Chapter 4, of the Session Laws of 1897, Repealing relating to the incorporation of banks and to the governing of institutions doing a banking business, and receiving deposits, shall be and the same is inoperative and void, and all laws and parts of laws inconsistent herewith are repealed: Procided, That this Act shall not affect any offense committed or right of action accruing from (prior

former acts.

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