enter into articles of association, which shall specify in general terms the object for which the association is formed, and may contain any other provisions, not inconsistent with the provisions of this act, which the association may see fit to adopt for the regulation of the business of the association and the conduct of its affairs, which said articles shall be signed by the persons uniting to form the association, and a copy of them forwarded to the comptroller of the currency, to be filed and preserved in his office.

certificate to

SEC. 6. And be it further enacted, That the persons uniting Organization to form such an association shall, under their hands, make specify an organization certificate, which shall specify

First. The name assumed by such association, which name, name shall be subject to the approval of the comptroller.

Second. The place where its operations of discount and place of business, deposit are to be carried on, designating the state, territory,

or district, and also the particular county and city, town, or

village.

shares,

Third. The amount of its capital stock, and the number capital and of shares into which the same shall be divided.

&c., of

shareholders,

Fourth. The names and places of residence of the share-names, holders, and the number of shares held by each of them. Fifth. A declaration that said certificate is made to enable purpose of cersuch persons to avail themselves of the advantages of this act.

tificate.

seal to be evi

The said certificate shall be acknowledged before a judge Certificate to be acknowledged. of some court of record or a notary public, and such certificate, with the acknowledgment thereof authenticated by the seal of such court or notary, shall be transmitted to the comptroller of the currency, who shall record and carefully preserve the same in his office. Copies of such certificate, Copies under duly certified by the comptroller, and authenticated by his dence. seal of office, shall be legal and sufficient evidence in all courts and places within the United States, or the jurisdiction of the government thereof, of the existence of such association, and of every other matter or thing which could be proved by the production of the original certificate. SEC. 7. And be it further enacted, That no association shall Amount of capbe organized under this act, with a less capital than one than, &c. hundred thousand dollars, nor in a city whose population exceeds fifty thousand persons, with a less capital than two hundred thousand dollars: Provided, That banks with a Proviso. capital of not less than fifty thousand dollars may, with the approval of the Secretary of the Treasury, be organized in

ital to be not less

Associations, when to be cor

when to com

mence business.

Seal.

twenty years, un

less, &c.

officers.

any place the population of which does not exceed six thousand inhabitants.

SEC. 8. And be it further enacted, That every association porations and formed pursuant to the provisions of this act shall, from the date of the execution of its organization certificate, be a body corporate, but shall transact no business except such as may be incidental to its organization and necessarily preliminary, until authorized by the comptroller of the currency to commence the business of banking. Such association shall have power to adopt a corporate seal, and shall have succession by the name designated in its organization May continue certificate, for the period of twenty years from its organization, unless sooner dissolved according to the provisions of its articles of association, or by the act of its shareholders owning two thirds of its stock, or unless the franchise shall General powers. be forfeited by a violation of this act; by such name it may make contracts, sue and be sued, complain and defend, in any court of law and equity as fully as natural persons; it Directors and may elect or appoint directors, and by its board of directors appoint a president, vice-president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss said officers or any of them at pleasure, and appoint others to fill their places, and exercise under this act all such incidental powers as shall be necessary to carry on the business of banking by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin, and bullion; by loaning money on personal security; by obtaining, issuing, and circulating notes according to the provisions of this act; and its board of directors shall also have power to define and regulate by by-laws, not inconsistent with the provisions of this act, the manner in which its stock shall be transferred, its directors elected or appointed, its officers appointed, its property transferred, its general business conducted, and all the privileges granted by this act to associations organized under it shall be exercised and enjoyed; and its usual business shall be transacted at an office or banking house located in the place specified in its organization certifi cate.

By-laws

R. S., 5190, post, p. 197.

Directors; qualifications;

SEC. 9. And be it further enacted, That the affairs of every association shall be managed by not less than five directors, one to be presi- one of whom shall be the president. Every director shall,

dent.

during his whole term of service, be a citizen of the United
States; and at least three fourths of the directors shall have
resided in the state, territory, or district in which such
association is located one year next preceding their election
as directors, and be residents of the same during their con-
tinuance in office. Each director shall own, in his own right,
at least ten shares of the capital stock of the association of
which he is a director. Each director, when appointed or
elected, shall take an oath that he will, so far as the duty Oath
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 act, and that he is the bona fide owner, in his own
right, of the number of shares of stock required by this act,
subscribed 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; which
oath, subscribed by himself, and certified by the officer
before whom it is taken, shall be immediately transmitted
to the comptroller of the currency, and by him filed and
preserved in his office.

of directors.

filled.

SEC. 10. And be it further enacted, That the directors of any Term of office association first elected or appointed shall hold their places until their successors shall be elected and qualified. All sub- Elections. sequent elections shall be held annually on such day in the month of January as may be specified in the articles of association; and the directors so elected shall hold their places for one year, and until their successors are elected and qualified. But any director ceasing to be the owner of the requisite amount of stock, or having in any other manner become disqualified, shall thereby vacate his place. Any Vacancies, how 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. If from any cause an election of directors shall not be made at the time appointed, the association shall not for that cause be dissolved, but an election may be held on any subsequent day, thirty days' notice thereof in all cases baving 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 day on which the election shall

proxies.

be held, or if the election should not be held on the day fixed, the day for the election shall be designated by the board of directors in their by-laws, or otherwise: Provided, That if the directors fail to fix the day, as aforesaid, shareholders representing two thirds of the shares may.

Voting and SEC. 11. And be it further enacted, That in all elections of directors, and in deciding 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 authorized in writing; but no officer, clerk, teller, or book-keeper of such association shall act as proxy; and no shareholder whose liability is past due and unpaid shall be allowed to vote.

Capital stock to be divided into shares.

Transfer.

bility.

SEC. 12. And be it further enacted, That the capital stock of any association formed under this act shall be divided into shares of one hundred dollars each, and be deemed personal property and transferable on the books of the association in such manner as may be prescribed in the by-laws or articles of association; and every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all the rights and liabilities of the prior Rights of exist holder of such shares, and no change shall be made in the ing creditors not to be impaired. articles of association by which the rights, remedies, or security of the existing creditors of the association shall be impaired. The shareholders of each association formed under the provisions of this act, and of each existing bank or banking association that may accept the provisions of Individual lia- this act, 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 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 kept undiminished, and be in addition to the surplus provided for in this act; and if at any time there shall be a deficiency in said surplus of twenty per centum, the said banking association shall not pay any dividends to its shareholders until such deficiency shall be made good; and in

troller may with

case of such deficiency, the comptroller of the currency may compel said banking association to close its business and wind up its affairs under the provisions of this act. And When compthe comptroller shall have authority to withhold from an hold certificate. association his certificate authorizing the commencement of business, whenever he shall have reason to suppose that the shareholders thereof have formed the same for any other than the legitimate objects contemplated by this act.

ital stock.

SEC. 13. And be it further enacted, That it shall be lawful. Increase of capfor any association formed under this act, by its articles of association, to provide for an increase of its capital from time to time, as may be deemed expedient, subject to the limitations of this act: Provided, That the maximum of Maximum. such increase in the articles of association shall be determined by the comptroller of the currency; and no increase of capital shall be valid until the whole amount of such increase shall be paid in, and notice thereof shall have 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. And every association shall have power, by the vote of shareholders owning two thirds of its capital stock, to reduce the capital of such association to any sum not below the amount required by this act, in the formation of associations: Pro- Minimum. vided, That by no such reduction shall its capital be brought below the amount required by this act 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.

Amount to be commencing busi

paid in before

ness.

SEC. 14. And be it further enacted, That at least fifty per centum of the capital stock of every association shall be paid in before it shall be authorized to commence business; and the remainder of the capital stock of such association Remainder, when to be paid. shall be paid in instalments of at least ten per centum each on the whole amount of the capital as frequently as one instalment at the end of each succeeding month from the time it shall be authorized by the comptroller to commence business; and the payment of each instalment shall be certified to the comptroller, under oath, by the president or cashier of the association.