ished in said city or county, then in a newspaper published earest thereto, to any person who will pay the highest rice therefor, to be not less than the amount then due hereon, with the expenses of advertisement and sale; and he excess, if any, shall be paid to the delinquent shareolder. If no bidder can be found who will pay for such stock the amount due thereon to the association, and the cost of advertisement and sale, the amount previously paid shall be forfeited to the association, and such stock shall be sold as the directors may order, within six months from the time of such forfeiture, and if not sold it shall be canceled and deducted from the capital stock of the association. If Capital to be any such cancellation and reduction shall reduce the capital duced below of the association below the minimum of capital required by ceiver appointed. law, the capital stock shall, within thirty days from the date of such cancellation, be increased to the required amount; in default of which a receiver may be appointed, according to Section the provisions of section fifty-two hundred and thirty-four, to close up the business of the association.

restored if re

minimum, or re

page 12.

5142,

Comptroller to

determine if asso

to commence

21. (SEC. 5168.) Whenever a certificate is transmitted to the Comptroller of the Currency, as provided in this Title, ciation is entitled and the association transmitting the same notifies the Comp- business. troller that at least fifty per centum of its capital stock has been duly paid in, and that such association has complied with all the provisions of this Title required to be complied with before an association shall be authorized to commence the business of banking, the Comptroller shall examine into the condition of such association, ascertain especially the amount of money paid in on account of its capital, the name and place of residence of each of its directors, and the amount of the capital stock of which each is the owner in good faith, and generally whether such association has complied with all the provisions of this Title required to entitle it to engage in the business of banking; and shall cause to be made and attested by the oaths of a majority of the directors, and by the president or cashier of the association, a statement of all the facts necessary to enable the Comptroller to determine whether the association is lawfully entitled to commence the business of banking.

Certificate of officers and directors.

Certificates of authority to com

when to be is

22. (SEC. 5169.) If, upon a careful examination of the facts so reported, and of any other facts which may come mence business, to the knowledge of the Comptroller, whether by means of a sued. special commission appointed by him for the purpose of inquiring into the condition of such association, or otherwise, it appears that such association is lawfully entitled to commence the business of banking, the Comptroller shall give

cate of authority

certificate.

page 19.

to such association a certificate, under his hand and officia. seal, that such association has complied with all the provis ions required to be complied with before commencing the business of banking, and that such association is authorWhen certifi ized to commence such business. But the Comptroller may may be withheld. Withhold from an association his certificate authorizing the commencement of business, whenever he has reason to sup pose that the shareholders have formed the same for any other than the legitimate objects contemplated by this Title. Publication of 23. (SEC.5170.) The association shall cause the certificate issued under the preceding section to be published in some newspaper printed in the city or county where the associa Section 5171, tion is located, for at least sixty days next after the issuing thereof; or, if no newspaper is published in such city on county, then in the newspaper published nearest thereto. Increase of 24. (SEC. 5142.) Any association formed under this Title may, by its articles of association, provide for an increase of its capital from time to time, as may be deemed expedi ent, subject to the limitations of this Title. But the maxi mum of such increase to be provided in the articles of assoSee act May ciation shall be determined by the Comptroller of the Cur 1, 1886, page 75. rency; and no increase of capital shall be valid until the whole amount of such increase is paid in, and notice thereof has been transmitted to the Comptroller of the Currency, and his certificate obtained specifying the amount of such increase of capital stock, with his approval thereof, and that it has been duly paid in as part of the capital of such association.

capital stock.

capital stock.

Reduction of 25. (SEC. 5143.) Any association formed under this Title may, by the vote of shareholders owning two-thirds of its capital stock, reduce its capital to any sum not below the amount required by this Title to authorize the formation of associations; but no such reduction shall be allowable which will reduce the capital of the association below the amount required for its outstanding circulation, nor shall any such reduction be made until the amount of the proposed reduction has been reported to the Comptroller of the Currency and his approval thereof obtained.

Rights of share.

holders to vote at elections.

Proxies.

26. (SEC. 5144.) In all elections of directors, and in de ciding all questions at meetings of shareholders, each shareholder shall be entitled to one vote on each share of stock held by him. Shareholders may vote by proxies duly au thorized in writing; but no officer, clerk, teller, or bookkeeper of such association shall act as proxy; and no shareholder whose liability is past due and unpaid shall be allowed to vote.

and

election of direct

27. (SEC. 5145.) The affairs of each association shall be Number anaged by not less than five directors, who shall be elected ors. y the shareholders at a meeting to be held at any time be. ore the association is authorized by the Comptroller of the Currency to commence the business of banking; and aftervard at meetings to be held on such day in January of each ear as is specified therefor in the articles of association. The lirectors shall hold office for one year, and until their suc- Term of office. :essors are elected and have qualified.

of directors.

Oath required

28. (SEC. 5146.) Every director must, during his whole Qualifications erm of service, be a citizen of the United States, and at east three-fourths of the directors must have resided in the State, Territory, or District in which the association is lo cated, for at least one year immediately preceding their election, and must be residents therein during their continuance in office. Every director must own, in his own right, at least ten shares of the capital stock of the association of which he is a director. Any director who ceases to be the owner of ten shares of the stock, or who becomes in any other manner disqualified, shall thereby vacate his place. 29. (SEC.5147.) Each director, when appointed or elected, from directors. shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of such association, and will not knowingly violate, or willingly permit to be violated, any of the provisions of this Title, and that he is the owner in good faith, and in his own right, of the number of shares of stock required by this Title, sub. scribed by him, or standing in his name on the books of the association, and that the same is not hypothecated, or in any way pledged, as security for any loan or debt. Such oath, subscribed by the director making it, and certified by the officer before whom it is taken, shall be immediately transmitted to the Comptroller of the Currency, and shall be filed and preserved in his office.

Vacancies how filled.

Proceedings

where no election

on the

30. (SEC. 5148.) Any vacancy in the board shall be filled by appointment by the remaining directors, and any director so appointed shall hold his place until the next election. 31. (SEC. 5149.) If, from any cause, an election of direct ors is not made at the time appointed, the association shall is held proper day. not for that cause be dissolved, but an election may be held on any subsequent day, thirty days' notice thereof in all cases having been given in a newspaper published in the city, town, or county in which the association is located; and if no newspaper is published in such city, town, or county, such notice shall be published in a newspaper published nearest thereto. If the articles of association do not fix the

The president must be a direct

or.

Individual liability of shareholders.

Exception

to individual liability.

day on which the election shall be held, or if no election is held on the day fixed, the day for the election shall be des ignated by the board of directors in their by-laws, or otherwise; or if the directors fail to fix the day, shareholders representing two-thirds of the shares may do so.

32. (SEC. 5150.) One of the directors, to be chosen by the board, shall be the president of the board.

33. (SEC. 5151.) The shareholders of every national banking association shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts. and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in as addition to the amount invested in such shares; except that shareholders of any banking association now existing under State laws, having not less than five millions of dollars of capital actually paid in, and a surplus of twenty per centum on hand, both to be determined by the Comptroller of the Currency, shall be liable only to the amount invested in their shares; and such surplus of twenty per centum shall be kep undiminished, and be in addition to the surplus provided for in this Title; and if at any time there is a deficiency in such surplus of twenty per centum, such association shall not pay any dividends to its shareholders until the defi ciency is made good; and in case of such deficiency, the Receiver may Comptroller of the Currency may compel the association to be appointed for deficiency in sur- close its business and wind up its affairs under the provisions of Chapter four* of this Title.

plus.

trustees, etc., not

Executors, 34. (SEC. 5152.) Persons holding stock as executors, ad personally liable. ministrators, guardians, or trustees, shall not be personally subject to any liabilities as stockholders; but the estates

Duties and liabilities of associa

nated as deposi

moneys.

and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward, or person interested in such trust-funds would be, if living and competent to act and hold the stock in his own name. 35. (SEC. 5153.) All national banking associations, desig tions when designated for that purpose by the Secretary of the Treasury, taries of public shall be depositaries of public money, except receipts from customs, under such regulations as may be prescribed by the Secretary; and they may also be employed as financial agents of the Government; and they shall perform all such reasonable duties, as, depositaries of public moneys and financial agents of the Government, as may be required of them. The Secretary of the Treasury shall require the associations thus designated to give satisfactory security, by

*Chapter five of this compilation.

the deposit of United States bonds and otherwise, for the safe-keeping and prompt payment of the public money deposited with them, and for the faithful performance of their duties as financial agents of the Government. And every association so designated as receiver or depositary of the public money shall take and receive at par all of the national currency bills, by whatever association issued, which have been paid into the Government for internal revenue, or for loans or stocks.

State banks

as

Organization of national banking

associations.

Mode of procedure.

Shares and bank after con

powers of State

version.

36. (SEC. 5154.) Any bank incorporated by special law, or any banking institution organized under a general law of any State, may become a national association under this Title by the name prescribed in its organization certificate; and in such case the articles of association and the organization certificate may be executed by a majority of the directors of the bank or banking institution; and the certificate shall declare that the owners of two-thirds of the capital stock have authorized the directors to make such certificate, and to change and convert the bank or banking institution into a national association. A majority of the directors, after executing the articles of association and or ganization certificate, shall have power to execute all other papers, and to do whatever may be required to make its organization perfect and complete as a national association. The shares of any such bank may continue to be for the same amount each as they were before the conversion, and the directors may continue to be the directors of the association until others are elected or appointed in accordance with the provisions of this chapter; and any State bank which is a stockholder in any other bank, by authority of State laws, may continue to hold its stock, although either bank, or both, may be organized under and have accepted the provisions of this Title. When the Comptroller of the To have the same rights, liaCurrency has given to such association a certificate, under bilities, etc., as his hand and official seal, that the provisions of this Title sociations. have been complied with, and that it is authorized to commence the business of banking, the association shall have the same powers and privileges, and shall be subject to the same duties, responsibilities, and rules, in all respects, as are prescribed for other associations, originally organized as national banking associations, and shall be held and regarded as such an association. But no such association Minimum capshall have a less capital than the amount prescribed for associations organized under this Title.

other national as

ital.

37. (SEC. 5155.) It shall be lawful for any bank or bank-, State banks ing association, organized under State laws, and having

having branches.