period not exceeding six months, or both, at the discretion of the court, for each and every offense.

Increase or Reduction of Stock.

I. Any banking company hertofore formed or which may be hereafter formed under the provisions of this chapter, at any general, adjourned or special meeting of the stockholders thereof, may by resolution make such increase or reduction of the capital stock thereof as may be decided upon by said stockholders, a majority of the stock of such company being represented at such meeting by the holders thereof, and such holders being present in person or by proxy and voting for such increase or reduction; provided, that no increase or reduction shall conflict with the limitations prescribed in section seventy-seven of this chapter, and that a notice over the signature of the president of såid banking company, of the intention to offer such resolution, shall be sent through the United States mail to each stockholder ten days previous to such meeting; or that notice of such intention be given by advertisement published once a week for two successive weeks in some newspaper of general circulation in this state, or for ten days in some daily paper of like circulation printed in this state; when such increase or reduction shall have been made by any such banking company, the president thereof shall, under his signature and the seal of such bank, certify the resolution increasing or reducing the capital stock to the secretary of state; and the secretary of state, under his hand and the great seal of state, shall issue to such bank a certificate reciting such resolution and declaring such increase or reduction to be authorized by law and such certificates shall be prima facie evidence of such increase or reduction and of the authority to make the same in all courts of law.

Payment of Capital Stock.

II. At least fifty per centum of the capital stock of every banking institution organized under the provisions of this chapter, shall be paid in before it shall be authorized to transact any business, except that which is incidental and necessarily preliminary to its organization, and the remainder of the capital stock shall be paid in installments of at least ten per centum each. Ten per cent on the residue of the capital stock each three succeeding

months from the time it shall be authorized to commence business; and in no case shall a bank or banking institution commence public business until it shall have received the certificate of authority from the commissioner of banking, as provided in sub-section nine, section eighty-one of this chapter. All banks organized under former laws and now doing business in this state, whose subscribed capital stock is not fully paid in, shall be required to collect the full amount of their subscribed capital within two years from the date this act takes effect.

III. The stockholders of every bank heretofore organized or that may hereafter be organized under the provisions of this chapter, shall be personally liable to the creditors thereof over and above the amount of stock held by them respectively, to an amount equal to their respective shares so held for all liabilities accruing while they are such stockholders.

IV. For every bank subject to the provisions of this chapter, there shall be a board of directors who shall have power to do or cause to be done, all things that are proper to be done by the bank; every director must own in his own right at least five shares of the capital stock of the bank of which he is the director, and before entering on his duties as such director he shall take an oath that he will, so far as the duty devolves upon him, diligently and honestly administer the affairs of the bank, and that he will not knowingly and willingly permit to be violated any of the provisions of the laws of this state relative to banking, and that the stock standing in his name upon the books of the bank is not hypothecated in any way or pledged as security for loans obtained or debts owing; which oath, subscribed by himself and certified by the officer before whom it was taken, shall be filed and carefully preserved in the office of the commissioner of banking.

V. It is further expressly provided that all savings banks, cooperative banking associations and trust companies engaged in a general banking business shall be subject to the provisions of this chapter; but nothing herein contained shall be construed to authorize any trust company to do business in this state with a capital of less than one hundred thousand dollars, paid up and unimpaired as provided by section six of chapter seven of the acts of one thousand nine hundred and three; and that all building and loan associations and mutual investment associations doing business in this state shall be subject to state supervision as follows:

V-a. Every such association organized under the laws of this state, and desiring to operate within the state, shall file with the commissioner of banking a certified copy of its charter, constitution and by-laws; said commissioner shall carefully examine the same and if he find that they provide a just and equitable plan for the management of the association's business, he shall issue to such association a certificate of authority permitting it to begin businesss; but if he find the provisions of said charter, constitution and by-laws to be impracticable, unjust or inequitable, or oppressive to any class of shareholders, he shall withhold his certificate of authority. It shall not be lawful for any association hereafter organized under the laws of this state for the purposes above set forth, to transact any business except the execution of its articles of incorporation, the adoption of its constitution and by-laws, and the election of directors and officers, until it shall have procured the certificate of authority above provided for, nor shall any amendment of the charter, constitution or by-laws of any such association become operative until a copy of the same shall have been filed, and a certificate of authority obtained, as above provided in regard to original charter, constitution and by-laws. Any one violating the provisions of this section shall be deemed guilty of a misdemeanor, and on conviction thereof shall be fined not less than five hundred dollars nor more than one thousand dollars, and at the discretion of the court may be imprisoned in the county jail not more than six months. Every building and loan association or mutual investment association organized under the laws of this state, and operating within the state, shall at least twice a year, at such times as may be designated by the commissioner of banking, file in the office of said commissioner within ten days after the receipt of his request for same, a statement verified by its president or secretary and approved by three of its directors, in such form as may be prescribed by said commissioner, setting forth its actual financial condition and the amount of its assets and liabilities, and furnish such other information as to its affairs as the said commissioner may require, which reports, in the same form in which they are transmitted to the commissioner of banking shall be printed and circulated among all the stockholders of the association. Every person who shall wilfully or knowingly subscribe or make, or cause to be made, any false statements or any false entries in any book of any association above mentioned.

or exhibit false papers with the intent to deceive any person authorized to examine into the affairs of such association, or shall make, state or publish any false statement of the financial condition of such association, shall be deemed guilty of a felony, and upon conviction thereof shall be fined not exceeding ten thousand dollars, and be imprisoned in the state penitentiary not less than one nor more than five years.

V-b. At least once in every year the commissioner of banking, either in person or by competent assistant, shall make a thorough examination of the books and affairs of every association mentioned in the next preceding sub-section of this act; he shall carefully examine all notes and mortgages and all other assets of the concern, and shall ascertain the full amount of its liabilities; he shall see that the books are kept properly posted and balanced, and that complete trial balances are struck at regular intervals; if at any time he shall find one of these institutions in an insolvent condition, he shall deal with it according to the manner prescribed for dealing with insolvent banks; and for making such examination the association shall pay a fee of ten dollars and the said fee shall be collected by the examiner and covered into the state treasury.

V-c. It shall not be lawful for any foreign building and loan association, or mutual investment association or trust company to transact any business in this state directly or indirectly without first procuring a certificate of authority from the commissioner of banking; before obtaining such certificate such foreign association shall furnish the commissioner of banking an itemized statement of its financial condition and all such other information touching its affairs as the said commisisoner may require, which statement and information shall be verified by the oath of the president or secretary of the association; such foreign association shall also file with the commissioner of banking a certified copy of the laws of the state, territory or government under which it is incorporated, and of its constitution and by-laws and all amendments thereto, and shall appoint an attorney in each county in which it transacts or solicits business, who shall be a resident of such county; and shall file with the commissioner of banking a written instrument, duly signed and sealed, authorizing such attorney of such association to acknowledge service of process in behalf of such association, consenting that the service of process, mesne

or final, upon such attorney shall be taken and held as if served upon the association, according to the laws of this state or any other state, and waiving all claim or right of error by reason of such acknowledgment of service; if, after examination of such statements and certified copies of instruments, and after such association shall have complied with the provisions of this act with reference to the appointment of an attorney or attorneys, the commissioner of banking shall be satisfied that said association is solvent and that the capital and investments are secure, and that the laws, charters, articles of incorporation, constitution and bylaws governing it, afford as ample protection to the interests of its members as is afforded by the laws of this state to members of associations chartered by and doing business in this state, he may grant such an association a certificate of authority permitting it to transact business in this state until the thirty-first day of the next succeeding December; but the same statements and the same certificates shall be renewed every year as long as such association shall continue to do business in this state; and for every certificate issued the commissioner of banking shall collect a sum of twenty-five dollars and cover the same into the treasury of the state. Any person, agent or company doing business or attempt ing to do business in this state for any foreign building associa tion, mutual investment company or trust company, which shall not at the time be a holder of a valid certificate of authority as provided for in this act, shall be deemed guilty of a misdemeanor, and on conviction thereof shall be fined not less than five hundred dollars nor more than one thousand dollars for each and every offense.

VI. Any person, bank, association or mutual investment company violating any of the provisions of this act shall, in addition to the other penalties herein, be deemed guilty of a misdemeanor and be fined not less than twenty-five dollars nor more than two hundred dollars.

Stocks not to be Used as Security for Loans.

Sec. 79. No bank shall make any loan or discount on the secu rity of the shares of its own capital stock, to an amount in excess of fifty per cent of such capital stock, nor be the purchaser or holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in