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X-6812 DIGEST OF STATE LAWS RELATING TO PRIVATE BANKS OR BANKERS. The f o l l o w i n g i s a d i g e s t of t h e laws of t h e s e v e r a l S t a t e s having r e f e r e n c e t o the o r g a n i z a t i o n and. o p e r a t i o n of p r i v a t e banks or "bankers, which was prepared i n the o f f i c e of t h e General Counsel t o the Federal Reserve Board w i t h the a s s i s t a n c e of t h e Counsel f o r the v a r i o u s Federal r e s e r v e hanks. Only t h e p r o v i s i o n s of S t a t e laws p e r t a i n i n g t o t h e o r g a n i z a t i o n and o p e r a t i o n of p r i v a t e "banks or "bankers and t h e n a t u r e and scope of t h e supervision of them exercised "by the S t a t e "banking a u t h o r i t i e s have "been covered i n t h e d i g e s t ; and no attempt has been made to d i g e s t i n d e t a i l any p r o v i s i o n s p e r t a i n i n g t o l i q u i d a t i o n . The laws of some S t a t e s r e q u i r e p r i v a t e "banks or "bankers t o conduct t h e i r "business i n accordance w i t h the p r o v i s i o n s covering incorporated "banks. In such c a s e s , t h i s general requirement has "been d i g e s t e d , "but no attempt has been made to d i g e s t t h e p r o v i s i o n s covering incorporated banks. In p r e p a r i n g t h i s d i g e s t , i t has been assumed t h a t the terms " p r i v a t e bank" and " p r i v a t e banker" a r e g e n e r a l l y understood to embrace a l l p e r s o n s , f i r m s , p a r t n e r s h i p s , a s s o c i a t i o n s or other o r g a n i z a t i o n s engaged i n one or more of t h e g e n e r a l l y recognized phases of the banking business without being i n c o r p o r a t e d . Where, however, t h e term " p r i v a t e bank" or " p r i v a t e banker" i s d e f i n e d i n t h e S t a t e laws, such d e f i n i t i o n i s summarized i n the d i g e s t . «•» i, *k ki.nmi. X-5312 : 134 P r i v a t e banks s u b j e c t to same g e n e r a l p r o v i s i o n s as i n c o r p o r a t e d banks and to c e r t a i n a d d i t i o n a l s p e c i f i c p r o v i s i o n s . The laws of t h i s S t a t e c r e a t e a banking department which i s charged with the execution of a l l laws r e l a t i n g to *** i n d i v i d u a l s doing or c a r r y i n g on a banking business i n the S t a t e of Alabama*" The laws a l s o provide t h a t 11 The word 'bank 1 as h e r e i n used means any p e r s o n , f i r m , p a r t n e r s h i p or corporation doing or carrying on a banking b u s i n e s s , * * *, u n l e s s used i n such connection and so as to exp r e s s a d i f f e r e n t meaning" r i n d i c a t i n g t h a t s o - c a l l e d p r i v a t e bankers a r e s u b j e c t to the same general p r o v i s i o n s as are made a p p l i c a b l e to i n c o r p o r a t e d banks, ( C i v i l Code, Sec. 6275; Banking laws, 1928, s e c . 6275, p . 3 ) , I n a d d i t i o n , the lairs a l s o contain p r o v i s i o n s s p e c i f i c a l l y covering the o r g a n i z a t i o n , operation and l i q u i d a t i o n of p r i v a t e bankers, and these p r o v i s i o n s are s e t f o r t h below. 11 Organization; n o t i c e of i n t e n t i o n to commence b u s i n e s s : p u b l i c a t i o n o f . "Ho i n d i v i d u a l or i n d i v i d u a l s or p a r t n e r s h i p s h a l l commence the carrying on of the banking b u s i n e s s without f i r s t giving n o t i c e of i n t e n t i o n to organize and c a r r y on such b u s i n e s s by p u b l i c a t i o n a t l e a s t once a week f o r four successive weeks i n a newspaper to be designated by the superintendent of banks p u b l i s h e d i n the c i t y or town or county where such bank i s proposed to be l o c a t e d . Such n o t i c e s h a l l s p e c i f y the name or names of the i n d i v i d u a l or i n d i v i d u a l s p r o posed to ce i n t e r e s t e d i n such bank, what i n t e r e s t each w i l l have, the amount of the c a p i t a l proposed to be used i n the proposed banking b u s i n e s s , the name under which and the place whore the business r i l l be c a r r i e d on, and the bona f i d e cash value of the a s s e t s and p r o p e r t y of each i n d i v i d u a l to be i n t e r e s t e d i n the bank, over and above a l l i n debtedness. Copy of such published n o t i c e * * * s h a l l be made and f i l ed with the s u p e r i n t e n d e n t of banks," ( C i v i l Code, sec. 6349; Banking Laws j 1928, s e c . 6349, p . 24;) I n v e s t i g a t i o n by superintendent of banks. "The superintendent of banks s h a l l i n v e s t i g a t e and a s c e r t a i n whether the c h a r a c t e r and general f i t n e s s of the i n d i v i d u a l s named, are sucn as to command the confidence of the community i n which s a i d bank i s proposed to be l o c a t e d , and t h a t there i s p u b l i c n e c e s s i t y f o r s a i d bank, and s u f f i c i e n t business to support the same i n s a i d community, the same as i s r e q u i r e d p r e l i m i n a r y to the i n c o r p o r a t i o n of a bank under the p r o v i s i o n s of t h i s a r t i c l e . " I f , a f t e r such i n v e s t i g a t i o n , the superintendent i s of the opinion t h a t the f a c t s do not warrant the e s t a b l i s h m e n t of such bank, "he s h a l l i s s u e under h i s hand and o f f i c i a l s e a l , in d u p l i c a t e , a r e f u s a l to permit the i n d i v i d u a l s proposed to be i n t e r e s t e d i n the proposed bank from operating the bank, and s h a l l **** transmit to the p r o b a t e judge of the county in which the bank i s proposed 135 " g u X-C.812 to be l o c a t e d and. do "business, one of the d u p l i c a t e s of h i s r e f u s a l , which the p r o b a t e judge s h a l l f i l e rnd record in h i s o f f i c e , and the o t h e r d u p l i c a t e of h i s r e f u s a l the superintendent s h a l l f i l e i n h i s o f f i c e . " ( C i v i l Code, s e c . 6350; Banking Laws, 1928, s e c . 6350, p . 24.) A p p l i c a t i o n f o r permit t o commence b u s i n e s s . "Before any *** i n d i v i d u a l banker s h a l l t r a n s a c t any business as a bank, such *** i n d i v i d u a l s h a l l f i l e iv i th the superintendent r e quest f o r a permit to commence b u s i n e s s . " ( C i v i l Code, s e c . 8351; Banking Laws, 1928, s e c . 6351, p . 2 4 . ) Written approval of superintendent of banks r e q u i r e d . "Ho *** i n d i v i d u a l or i n d i v i d u a l s s h a l l t r a n s a c t any b u s i n e s s a s a bank i n t h i s S t a t e other than such as r e l a t e s t o the formation of such bank without the w r i t t e n approval of the superintendent of banks and without h i s w r i t t e n c e r t i f i c a t e s t a t i n g t h a t such *** i n d i v i d u a l banker has complied with a l l the requirements of law and i s a u t h o r i z e d to t r a n s a c t b u s i n e s s w i t h i n t h i s S t a t e as a bank and t h a t such business can be s a f e l y e n t r u s t e d to i t , which c e r t i f i c a t e s h a l l be recorded i n the o f f i c e of the superintendent i n a book to be kept by him f o r t h a t purpose, and a c e r t i f i e d copy thereof under the hand and o f f i c i a l s e a l of the s u p e r i n t e n d e n t s h a l l be f i l e d and recorded i n t h e o f f i c e of the . p r o b a t e judge of the county wherein the *** i n d i v i d u a l i s to have i t s , h i s or t h e i r p r i n c i p a l place of b u s i n e s s , a t the expense of the bank"• ( C i v i l Code, s e c . 6352; Banking Laws, 1928, s e c . 6352, p . 25.) Examination by s u p e r i n t e n d e n t as to payment of c a p i t a l . "The s u p e r i n t e n d e n t s h a l l , b e f o r e i s s u i n g h i s permit to any *** i n d i v i d u a l banker to commence b u s i n e s s , examine or cause an examination to be made i n order to a s c e r t a i n whether the r e q u i s i t e c a p i t a l of such bank has been p a i d i n i n c a s h . The superintendent s h a l l not a u t h o r i z e such *** i n d i v i d u a l banker to commence business u n l e s s i t appears to h i s s a t i s f a c t i o n from such examination, or other evidence s a t i s f a c t o r y to him, t h a t the r e q u i s i t e c a p i t a l has, in good f a i t h , been s u b s c r i b e d , and p a i d i n cash." ( C i v i l Code, sec. 6353; Banking Laws, 1928, s e c . 6353, p . 25.) Transacting b u s i n e s s without permit; p e n a l t y . "Any person who s h a l l h e r e a f t e r t r a n s a c t any business as an o f f i c e r or agent *** of an i n d i v i d u a l banker h e r e a f t e r commencing b u s i n e s s , b e f o r e such *** i n d i v i d u a l banker i s authorized to t r a n s a c t busine ss as a bank by the permit of the superintendent of banks, s h a l l be g u i l t y of a misdemeanor and, upon conviction, s h a l l be f i n e d not l e s s than one hundred nor more than one thousand d o l l a r s . " (Criminal Code, s e c . 3400; Banking Laws, 1928, s e c . 3400, p . 63.) ** 3 « X-S812 I n d i v i d u a l ,nay appeal from d e c i s i o n of superincandent r e f u s i n g p e r m i t . An i n d i v i d u a l may appeal to the S t a t e Banking Board and a court of competent j u r i s d i c t i o n from a d e c i s i o n r e f u s i n g him the r i g h t to e s t a b l i s h an i n d i v i d u a l bank. ( C i v i l Code, sec. 6356; Banking Laws, 1928, s e c . 5356, p . 25.) Annual assessments f o r expenses of banking department. Each p r i v a t e banker on the c a l l of the superintendent of banks, i s r e q u i r e d to pay a c e r t a i n amount i n t o the t r e a s u r y of the S t a t e , between the f i r s t day of January and the f i r s t day of April of each y e a r , or a t such other time as the superintendent may d e s i g n a t e , to be used as an a i d i n d e f r a y i n g the expenses of the banking department. ( C i v i l Code, s e c . 6287; Banking laws, 1928, s e c . 5387, p . C). Each bank f a i l ing to pay t h i s assessment " s h a l l f o r f e i t to tae S t a t e f i v e ($5.00) d o l l a r s f o r each day a f t e r i t i s ( i n ) d e f a u l t , ***". ( C t v i l Code, s e c . 6288; Banking Laws, 1928, sec. 6288, p . 7 ) . Examinations; number and nature o f . "The s u p e r i n t e n d e n t of banks s h a l l e i t h e r p e r s o n a l l y , or by comp e t e n t examiner appointed by him, v i s i t and oxaiaine *** every i n d i v i d u a l banker doing a banking b u s i n e s s , i n and under the laws of the S t a t e of Alabama, a t l e a s t twice i n each y e a r . On every such examination, i n q u i r y s h a l l be made as to the condition and resources of the corporation (or the i n d i v i d u a l or i n d i v i d u a l s i n case of i n d i v i d u a l bankers), the mode of conducting and managing the a f f a i r s of the bank, ***, the investment of the funds of the bank, the s a f e t y and prudence of the management of the "bank, and whether the requirements of i t s c h a r t e r and of law have been complied with i n the a d m i n i s t r a t i o n of the a f f a i r s of the bank, and as to such other matters as the superintendent of banks may p r o s c r i b e In a d d i t i o n , the superintendent Of banks s h a l l in l i k e manner examine or cause to be examined i n t o the a f f a i r s of every *** i n d i v i d u a l banker doing a banking b u s i n e s s whenever i n the judgment of the superintendent the management and condition of the bank i s such as t o render an exami n a t i o n of i t s a f f a i r s necessary or expedient, or whenever i n the opinion of the superintendent the i n t e r e s t of the ryublic demands an examinat i o n . " ( C i v i l Code, sec. 6289; Banking Laws, 1928, s e e . 6289, pp. 7 and 8). Reserve requirements. "Ifo bank, f i r m , person or corporation doing a banking business s h a l l reduce, or be allowed to reduce the cash of the bank jr hand below f i f t e e n p e r cent of donnnd d e p o s i t s , provided t h a t t h r e e - f i f t h s of s a i d f i f t e e n p e r cent reserve may c o n s i s t of the balance due by banks and bankers to s a i d bank when payable on demand." ( C i v i l Code, s e c . 6337; Banking Laws, 1928, sec. 6337, p . 19). X-6812 - 4 F a i l u r e of p r i v a t e "banker to pay over money on demand. Atiy p r i v a t e "banker who s e l l s or disposes of p r o p e r t y f o r a n o t h e r , and r e f u s e s f o r t h r e e days a f t e r demand made "by t h e person e n t i t l e d to make such demand or h i s agent or a t t o r n e y , t o pay t h e amount t o which such person i s e n t i t l e d , must on c o n v i c t i o n , "be f i n e d not more than one thousand d o l l a r s , and may a l s o "be imprisoned i n the county j a i l , or sentenced to hard 16bor f o r t h e county f o r not more than s i x months. (Code of Alabama, 1923, s e c . 3976.) 138 X-S812 00#, • V*™# Impairment of c a p i t a l : w ^ e r aau duty of s u o e r i m c n c o n t . "Tnenever the superintendent of "banks s h a l l have reason to "believe t h a t the *** c a p i t a l of any i n d i v i d u a l "banker i s reduced "by impairment or otherwise "below the amount of i t s paid-up c a p i t a l s t o c k , he s h a l l r e q u i r e such *** i n d i v i d u a l "banker to make good the d e f i c i t within t h i r t y days a f t e r the date of t h e requirement "by him, which requirement s h a l l be i n w r i t i n g . The s u p e r i n t e n d e n t may examine or cause to "be examined i n t o the a f f a i r s of any such "bank to a s c e r t a i n the amount of such impairment or r e d u c t i o n of c a p i t a l and whether t h e d e f i c i e n c y has "been made good a s r e quired "by him". ( C i v i l Code, s e c . 6297; Banking Laws, 1928, s e c . 6297, P- 9 ) . Superintendent mast r e q u e s t c o r r e c t i o n of u n s a f e p r a c t i c e s . "The s u p e r i n t e n d e n t of "banks s h a l l submit to the *** governing body of any i n d i v i d u a l banker, and request a c o r r e c t i o n of any matter i n the conduct of the a f f a i r s of the bank which, i n h i s opinion, i s uns a f e . " ( C i v i l Code, s e c . 6298; Banking Laws, 1928, sec. 6298, p . S ) . Unsafe or unsound condition or other matters of d e f a u l t or misconduct: superintendent may take p o s s e s s i o n . "Whenever i t s h a l l appear to the superintendent of banks t h a t any *** i n d i v i d u a l banker has v i o l a t e d i t s c h a r t e r or any law of the S t a t e , or i s conducting business i n any unauthorized manner, or i f the c a p i t a l of *** any i n d i v i d u a l banker i s impaired and not made good under the requirement of the superintendent within the r e q u i r e d time, or i f any such *** i n d i v i d u a l banker s h a l l r e f u s e to submit i t s p a p e r s , books and concerns to the i n s p e c t i o n of the superintendent or any exami n e r , or i f any o f f i c e r thereof s h a l l r e f u s e to be examined on oath touching the conduct of any such *** i n d i v i d u a l banker or i f any such *** i n d i v i d u a l banker s h a l l suspend payment of i t s o b l i g a t i o n s or i f from any examination the superintendent s h a l l have reason to conclude t h a t such *** i n d i v i d u a l banker i s i n an unsound or unsafe c ondition to t r a n s a c t the b u s i n e s s f o r ''hich i t was organized, or t h a t i t i s uo#» s a f e f o r i t to continue b u s i n e s s , or i f any such *** i n d i v i d u a l banke r s h a l l n e g l e c t or r e f u s e to observe any order of the superintendent d i r e c t i n g or r e q u i r i n g the doing of any p a r t i c u l a r t h i n g r e q u i r e d to be done by law, the superintendent may c a l l a meeting of the banking board and submit to s a i d board m a t t e r s of d e f a u l t or misconduct i n the a f f a i r s of t h e banks of which the bank s h a l l have n o t i c e and u p on which the bank may be heard i n person or by counsel, and i f s a i d board or a m a j o r i t y of s a i d board, so d i r e c t s , the superintendent s h a l l f o r t h w i t h take possession of the p r o p e r t y and b u s i n e s s of such *** i n d i v i d u a l banker and r e t a i n such possession u n t i l such *** i n d i v i d u a l banker s h a l l resume b usine ss or i t s a f f a i r s be f i n a l l y l i q u i d a t e d , as h e r e i n provided". ( C i v i l Code, sec. 6299; Banking Laws, 1923, s e c . 6299, pp. 9 and 1 0 ) . 139 - 6 - X-SS12 Superintendent not, to take char,-. <3 of i n d i v i d u a l "banker u n l e s s d i r e c t e d to do so "by banking board. "The s u p e r i n t e n d e n t of banlcs s h a l l not take possession of the p r o p e r t y and b u s i n e s s of any bank under the p r o v i s i o n s of t h i s a r t i c l e u n l e s s *** d i r e c t e d so to do by the banking board. On taking p o s s e s s ion of the p r o p e r t y and business of any such *** i n d i v i d u a l banker, the superintendent s h a l l give n o t i c e of such f a c t t o a l l banks and other p a r t i e s or c o r p o r a t i o n s holding or i n possession of any a s s e t s of such *** i n d i v i d u a l b a n k e r . " ( C i v i l Code, s e c . 5303; Banking Laws, 1928, s e c . 6303, p . 1 1 ) . ".Then business may "be resumed. " A f t e r the superintendent has taken possession of *** ( t h e ) b u s i n e s s of an i n d i v i d u a l banker, the superintendent may permit such *** i n d i v i d u a l banker to resume business upon such condition as may be approved by him including an observance of a l l the requirements of lav#, and making good a l l d e f i c i t s i n the previous observances of law." ( C i v i l Code, s e c . 6305; Banking Laws, 1928, s e c . 6305, p . 1 1 ) . L i q u i d a t i o n of a f f a i r s by s u p e r i n t e n d e n t . "Upon taking possession of any of the p r o p e r t y and b u s i n e s s of any *** i n d i v i d u a l banker, the superintendent may c o l l e c t moneys due to such *** i n d i v i d u a l banker and do such other a c t s as a r e necessary to conserve i t s a s s e t s and b u s i n e s s , and s h a l l proceed to l i q u i d a t e the a f f a i r s thereof as h e r e i n a f t e r provided. The superintendent s h a l l coll e c t a l l debts due and claims belonging to the bank." ( C i v i l Code, s e c . 5305; Banking Laws, 1928, s e c . 6305, p . 11). The laws a l s o contain det a i l e d p r o v i s i o n s r e l a t i n g to the powers and d u t i e s o f , and the p r o cedure to be followed by, the superintendent of banks i n the a c t u a l l i q u i d a t i o n of the a f f a i r s of an i n d i v i d u a l banker. ( C i v i l Code, s e c . 5304, 5307-6319 and 6325; Banking Laws, 1928, s e e s . 5304, 5307-6319 and 6325, pp. 11-14 and 16). ABIZO'.TA. P r i v a t e or p a r t n e r s h i p banks e x p r e s s l y p r o h i b i t e d . The laws of t h i s S t a t e provide t h a t "She e s t a b l i s h i n g or maintenance of p r i v a t e or p a r t n e r s h i p banks i s hereby e x p r e s s l y p r o h i b i t e d ; P20VIDSD, t h a t a l l such banks now i n operation s h a l l r e t i r e from b u s i ness or i n c o r p o r a t e under the p r o v i s i o n s of t h i s Chapter w i t h i n a p e r iod of f i v e y e a r s from and a f t e r the approval of t h i s Chapter". (Banking Laws, 1922, s e c . 30, p . 24; Senate B i l l No. 26, F i r s t Special Sess i o n of the F i f t h L e g i s l a t u r e of Arizona, sec. 3 0 ) . - 7 - X-S812 P r i v a t e banks p e r m i t t e d , "out s u b j e c t to same p r o v i s i o n s as i n c o r p o r a t e d "banks. The laws of t h i s S t a t e , i n d e f i n i n g the word "bank", recognize a p r i v a t e banking b u s i n e s s but i n d i c a t e t h a t such business i s s u b j e c t g e n e r a l l y to the same provisions as those ^hich cover i n c o r p o r a t e d banks. This d e f i n i t i o n reads i n p a r t as f o l l o w s : "Wherever the '7ord 'bank' appears i n t h i s (bank) a c t , i t s h a l l be deemed to apply a l i k e to any i n c o r p o r a t e d bank, t r u s t company, or savings bank, *** and a l s o to any p a r t n e r s h i p or i n d i v i d u a l t r a n s a c t ing a banking b u s i n e s s . " (Acts of 1913, Act 113, s e c . 10, as amended by Acts of 1923, Act 627, s e c . 17; Banking Law Pamphlet, 1929, s e c . 20, p . 1 4 ) . The f o l l o w i n g p r o v i s i o n s are s p e c i f i c a l l y made a p p l i c a b l e to p r i v a t e banks. Organization; a p p l i c a t i o n to bank commissioner. The laws provide t h a t persons d e s i r i n g to organize a corpora' t i o n f o r the purpose of t r a n s a c t i n g a banking or trust business "may apply to the (bank) Commissioner to be incorporated and s h a l l submit t h e i r proposed a r t i c l e s of agreement" which s h a l l s e t out c e r t a i n i n f o r m a t i o n . (Acts of 1913, Act 113, sec. 11; C. & M. Digest, s e c . 675; Banking Law Pamphlet, 1929, sec. 12, p . 8 ) . I f an a p p l i c a t i o n to engage i n the b u s i n e s s of banking i s made by a p r i v a t e bank, " i t s h a l l be i n such form as the Commissioner s h a l l p r e s c r i b e , and he s h a l l make the same i n q u i r y as i s r e q u i r e d i n cases of i n c o r p o r a t i o n b e f o r e i s s u i n g to such f i r m or i n d i v i d u a l h i s permit of any kind of a bank." (Acts of 1913, Act 113, s e c . 14; C & M. D i g . , s e c . 678; Banking Law Pamphlet, 1929, sec. 15, p . 11). With r e f e r e n c e to the "same inquiry" which the bank commiss i o n e r i n s t i t u t e s i n the case of an incorporated bank, the laws p r o vide t h a t "the Commissioner s h a l l a s c e r t a i n , from the b e s t source of i n f o r m a t i o n a t h i s command, the c h a r a c t e r and g e n e r a l f i t n e s s of the persons named a s s t o c k h o l d e r s (owners), and t h e i r s t a n d i n g i n the community i n which the proposed i n s t i t u t i o n i s to be l o c a t e d , and whether the r e q u i s i t e c a p i t a l has been i n good f a i t h subscribed and p a i d . " (Acts of 1913, Act 113, s e c . 12; C. & M. Dig., s e c . 675; Banking Law Pamphlet, 1929, sec. 13, p . 9 ) . Pee r e q u i r e d f o r o r g a n i z a t i o n , i n c r e a s e of c a p i t a l and amendment of c h a r t e r . "No c o r p o r a t i o n , f i r m or i n d i v i d u a l s h a l l be allowed to do a banking business of any kind u n l e s s i t , they, he, or she, s h a l l pay to the Bank Commissioner a fee of o n e - f i f t h of one p e r cent on the a u t h o r i z e d c a p i t a l stock* Fees a t the same r a t e s h a l l be charged f o r - g - X-6312 an i n c r e a s e of c a p i t a l s t o c k . " f o r each amendaent or supplement to the c h a r t e r , except f o r an i n c r e a s e of c a p i t a l stock, a fee of ten d o l l a r s s h a l l be charged. (Acts of 1915, Act 113, s e c . 16; C. & M. D i g . , s e c . 680; Banking Law Pamphlet, 1929, s e c . 17, p . 11). T i t l e mast show t h a t i n s t i t u t i o n i s not i n c o r p o r a t e d . Any i n d i v i d u a l or f i r m doing "business as a p r i v a t e bank s h a l l d e s i g n a t e a name f o r such bank, which s h a l l show t h a t i t i s not incor*p o r a t e d . (Acts of 1913, Act 113, sec. 15; C. & M. Dig., s e c . 579; Banking Law Pamphlet, 1929, sec. 16, p . 11). P r o p e r t y must be h e l d i n name of bank.' A l l r e a l and p e r s o n a l p r o p e r t y cmned by a p r i v a t e bank must be h e l d i n i t s name and not i n the name of the owner or owners of the bank. (Acts of 1913, Act 113, sec. 15; C. & 11. Dig., s e c . 679; Banking Law Pamphlet, 1929, s e c . 16, p . 11). When c r e d i t o r of owner may a t t a c h bank's a s s e t s . A l l of the a s s e t s of a p r i v a t e bank a r e exempt from attachment or execution by any c r e d i t o r of an owner u n t i l a l l of the l i a b i l i t i e s of the bank have been p a i d i n f a l l . (Acts of 1913, Act 113, s e c . 15; C. & M. Dig., s e c . 679; Banking Law Pamphlet, 1929, s e c . 16, p . 1 1 ) . Owner may not use b a n k ' s funds for "private b u s i n e s s : note of owner as a s s e t . "Ho p r i v a t e banker s h a l l use any of the funds of h i s bank f o r p r i v a t e b u s i n e s s , and the note of the owner or owners of any p r i v a t e bank s h a l l not be considered or accepted as a p a r t of i t s a s s e t s . " (Acts of 1913, Act 113, s e c . 15; C. & H. Dig., s e c . 679; Banking Law Pamphlet, 1929, sec. 16, p . 11). When owner's widow can be enaowed of bank's p r o p e r t y . "In case of the death of an i n d i v i d u a l banker, h i s widow s h a l l not be endowed of any of the p r o p e r t y of the bank, except such as re— mains a f t e r the payment of a l l d e p o s i t o r s and other c r e d i t o r s . " (Acts of 1913, Act 113, s e c . 15; C. & M. Dig., sec. 679; Banking Law Pamphlet, 1929, s e c . 16, p . 1 1 ) . Acceptances and l e t t e r s of c r e d i t : l i m i t of l i a b i l i t y . "Any *** p r i v a t e bank, *** may accept f o r payment a t a f u t u r e date d r a f t s drawn upon i t by i t s customers and to i s s u e l e t t e r s of c r e d i t a u t h o r i z i n g the holders thereof to draw d r a f t s upon i t or upon i t s correspondents a t s i g h t or on time not exceeding s i x months; p r o vided, t h a t no bank s h a l l incur l i a b i l i t i e s under t h i s s u b d i v i s i o n to an amount equal a t any time i n the aggregate t o more than i t s p a i d - u p and unimpaired c a p i t a l stock and c e r t i f i e d s u r p l u s f u n d . " (Act of March 22, 1919, p . 251, s e c . 4; C. & M. Dig., s e c . 741; Banking Law Panrohlet, 1929, s e c . 30, p . 2 1 ) . - 9 - X-6812 Banking business may only "oe transacted, "by corporations. The laws of t h i s S t a t e provide t h a t the b u s i n e s s of hanking may only he t r a n s a c t e d hy corporations duly organized f o r t h a t purpose. The p r o v i s i o n s i n t h i s connection read a s follows: "The word 'bank* as used i n t h i s a c t s h a l l be construed to mean any i n c o r p o r a t e d banking i n s t i t u t i o n wnich s h a l l have been i n corporated to conduct the business of r e c e i v i n g money on d e p o s i t , ***, *** I t s h a l l be unlawful f o r any c o r p o r a t i o n , p a r t n e r s h i p , firm or i n d i v i d u a l to engage i n or t r a n s a c t a banking business within t h i s s t a t e except by means of a corporation duly organized f o r such purpose. ***" ( C a l i f o r n i a Bank Act, 1929, s e c . 2, p . 3 ) . COLORADO. P r i v a t e banking b u s i n e s s -permitted, but made s u b j e c t to same p r o v i s i o n s as i n c o r p o r a t e d banks. The laws of t h i s S t a t e provide t h a t where the business of banking i s engaged i n by persons or copartnerships such business i s s u b j e c t to the same requirements as are made a p p l i c a b l e , to i n c o r p o r a t e d banks. The laws in t h i s connection read as follows: "The word 'Bank, 1 as used i h t h i s Act, s h a l l include every p e j v son, c o - p a r t n e r s h i p and c o r p o r a t i o n , except National Banks, engaged i n the b u s in e s s of banking i n the S t a t e of Colorado". (Laws of 1913, s e c . 1, p . 116; Compiled Laws of 1921, s e c . 2653; Banking Laws, 1928, s e c . 1 p. 3). "When by the p r o v i s i o n s hereof anything i s r e q u i r e d to be done by any i n c o r p o r a t e d bank or i t s board of d i r e c t o r s , or any o f f i c e r , d i r e c t o r or employee t h e r e o f , or t h e i r r i g h t or power to do a s p e c i f i e d a c t i s denied, the same act. s h a l l be done, or n o t , as the case may be, by i n d i v i d u a l s or c o - p a r t n c r s engaged i n the banking b u s i n e s s . " (Laws of 1913, s e c . 2 , p . 116; Compiled Laws of 1921, s e c . 2654; Banking Laws 1928, sec. 2, p . 3 ) . In a d d i t i o n to the p r o v i s i o n s a p p l i c a b l e to incorporated banks, persons or c o - p a r t n e r s h i p s a r e s u b j e c t to the following s p e c i f i c p r o visions: Word " S t a t e " may not be used a s -part of t i t l e . " I n d i v i d u a l s or c o - p a r t n e r s h i p s engaged i n banking s h a l l not use the v, ord ' S t a t e 1 as a p a r t of the bank or f i r m name." (Laws of 1913, s e c . 9, p . 118; Comoiled Laws of 1921, s e c . 2561; Banking Laws, 1928, s e c . 9, p . 7 ) . 143 «* u X-6812 Ownership of c a p i t a l stock "by c o p a r t n e r s . "Co-partners conducting a bank s h a l l each own a t l e a s t two per cent thereof ( c a p i t a l stock) i n no wise pledged or incumbered." (Laws of 1919, sec. 1, p . 299, amending Laws of 1913, sec. 12, p . 119; Comp i l e d Laws of 1921, s e c . 2664; Banking Laws, 1928, sec. 12, p . 9 ) . Oath r e q u i r e d of owner of unincorporated t a n k . "Every owner of any p o r t i o n of an unincorporated "bank a c t u a l l y engaged i n t h e management t h e r e o f , s h a l l t a k e and subscribe to an oath t h a t he w i l l , so f a r as the duty devolves upon him, d i l i g e n t l y and h o n e s t l y administer the a f f a i r s of the bank; t h a t he w i l l not knowingly v i o l a t e , nor w i l l i n g l y permit to be v i o l a t e d , any p r o v i s i o n of t h e law; t h a t he i s the owner i n good f a i t h of at l e a s t t h a t p a r t of t h e c a p i t a l s t o c k of said bank or t h a t p o r t i o n of t h e c a p i t a l employed t h e r e i n " s p e c i f i e d by the p r o v i s i o n l a s t above quoted. (Laws of 1913, s e c . 14, p . 119; Compiled Laws of 1921, sec. 2666; Banking Laws, 1928, sec. 14, p. 9 ) . Loans to co-owners p r o h i b i t e d . "No unincorporated bank s h a l l loan to any person or c o - p a r t n e r owning an i n t e r e s t t h e r e i n . Ho i n d i v i d u a l or c o - p a r t n e r owning an i n t e r e s t i n an unincorporated bank s h a l l become endorser f o r any p e r s o n , f i r m or corporation borrowing money t h e r e f r o m , nor s h a l l any note or o b l i g a t i o n of such i n d i v i d u a l or c o - p a r t n e r be considered an a s s e t of such bank." (Laws of 1913, sec. 33, p . 124; Compiled Laws of 1921, s e c . 2687; Banking Laws, 1928, s e c . 37, p. 21). COmiSCTICUT. P r i v a t e banking b u s i n e s s p r o h i b i t e d ; exceptions. The laws of t h i s s t a t e provide t h a t "Ho p e r s o n , f i r m , corpora t i o n or u n i n c o r p o r a t e d a s s o c i a t i o n cf p e r s o n s , other than a p r i v a t e banker who, on May 29, 1925, was engaged i n busine ss as a p r i v a t e banke r , and, p r i o r t h e r e t o , q u a l i f i e d as such by the f i l i n g of t h e bond or s e c u r i t i e s r e q u i r e d by the g e n e r a l s t a t u t e s , or a person, f i r m , corpora t i o n , or u n i n c o r p o r a t e d a s s o c i a t i o n of persons succeeding i n ownership to the b u s i n e s s of a p r i v a t e banker q u a l i f i e d as above .prbvi&ed, and who s h a l l , upon succeeding to such b u s i n e s s , comply with t h e p r o v i s i o n s of law r e l a t i n g t o p r i v a t e bankers, s h a l l engage i n the b u s i n e s s of a p r i v a t e banker, provided nothing h e r e i n contained s h a l l prevent any f i r m , p a r t n e r s h i p or unincorporated a s s o c i a t i o n of persons c a r r y i n g on the business of a p r i v a t e banker from changing or i n c r e a s i n g the member- ship of such f i r m , p a r t n e r s h i p or unincorporated a s s o c i a t i o n of persons or from r e o r g a n i z i n g i n t o a new f i r m , p a r t n e r s h i p or unincorporated a s s o c i a t i o n of p e r s o n s " . (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3958). X-6812 - 1 1 - "Ito p r i v a t e baialcer shall Use j as a p a r t Of h i s name or as a p r e f i x or s u f f i x t h e r e t o or as a d e s i g n a t i o n of the "business c a r r i e d •on "by him, t h e word ' b a n k e r ' , ' b a n k ' , ' b a n k i n g ' , ' t r u s t ' or ' s a v i n g s ' but he may do so i f he q u a l i f i e s i t by the word ' p r i v a t e ' " . (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3950). D e f i n i t i o n of term " p r i v a t e banker". "The term ' p r i v a t e banker' s h a l l mean any p e r s o n , c o r p o r a t i o n , f i r m , p a r t n e r s h i p or unincorporated a s s o c i a t i o n of p e r s o n s , engaged i n whole or i n p a r t i n the b u s i n e s s of r e c e i v i n g d e p o s i t s s u b j e c t t o check or f o r repayment upon the p r e s e n t a t i o n of a passbook, c e r t i f i c a t e of deposit or other evidence of d e b t , or f o r repayment upon r e q u e s t of t h e d e p o s i t o r , or engaged i n the busine ss of r e c e i v i n g money f o r t r a n s m i s s i o n , o t h e r than a bank, t r u s t company or b u i l d i n g and loan a s s o c i a t i o n organized under t h e laws of t h i s S t a t e or of t h e United S t a t e s or express companies having a c o n t r a c t or c o n t r a c t s with a r a i l w a y or r a i l ways covering express t r a n s p o r t a t i o n . " (General S t a t u t e s of Connecticut Revision of 1930, s e c . 3949). Bond must be f i l e d w i t h S t a t e Treasurer; purpose o f . Every p r i v a t e banker mast deposit w i t h the t r e a s u r e r of the S t a t e a bond executed by the p r i v a t e banker and by a s u r e t y company or the owner or owners of r e a l e s t a t e w i t h i n the S t a t e , approved by t h e bank commissioner. This bond s h a l l be conditioned upon t h e r e payment of any money which may be deposited w i t h the p r i v a t e banker and upon t h e f a i t h f u l t r a n s m i s s i o n of any money which may be d e l i v e r e d t o such banker f o r t r a n s m i s s i o n t o a n o t h e r , "and upon t h e payment, i n the event of the insolvency or bankruptcy of such p r i v a t e banker, of the f u l l amount r e c o v e r a b l e under the conditions of such bond to t h e a s s i g n e e , r e c e i v e r or t r u s t e e of such p r i v a t e banker f o r t h e b e n e f i t (1) of the persons making such d e p o s i t s or d e l i v e r i n g money t o such p r i v a t e banker f o r t r a n s m i s s i o n t o another and (2) the s a t i s f a c t i o n of t h e general d e b t s and o b l i g a t i o n s of such p r i v a t e banker". (General S t a t u t e s of Connecticut, Revision of 1930, s e c . 3951). Amount of bond dependent upon p o p u l a t i o n . "The amount of the bond r e q u i r e d of each p r i v a t e banker engaged i n b u s i n e s s i n any c i t y or town having a p o p u l a t i o n of twenty thousand or l e s s s h a l l be twenty thousand d o l l a r s , and of each p r i v a t e banker engaged i n b u s i n e s s i n any c i t y or town having a populat i o n i n excess of twenty thousand s h a l l be f o r t y thousand d o l l a r s . " (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3951). S e c u r i t i e s may be deposited i n l i e u of bonds. "Any p r i v a t e banker may, a t h i s o p t i o n , deposit w i t h t h e t r e a s u r e r i n l i e u of such bond, i n whole or i n p a r t , s e c u r i t i e s owned by him of a s u f f i c i e n t a c t u a l value t o . a g g r e g a t e , w i t h any bond so f i l e d , t h e r e q u i r e d amount of such bond, which s e c u r i t i e s s h a l l be such as s h a l l have been approved by the bank commissioner." (General S t a t u t e s of Connecticut, Revision of 1930, s e c . 3951). X-6812 — 12 — Release of "bond and s e c u r i t i e s . Any bond or s e c u r i t i e s deposited with the t r e a s u r e r may be r e l e a s e d and d e l i v e r e d t o the p r i v a t e banker upon the s u b s t i t u t i o n of another bond or s e c u r i t i e s aggregating the r e q u i r e d amount and approved by the bank commissioner. Any bond or s e c u r i t i e s s h a l l a l so be r e l e a s e d and d e l i v e r e d t o a p r i v a t e banker upon t h e d i s c o n tinuance of h i s b u s i n e s s and upon d e l i v e r y by him t o the t r e a s u r e r of the s t a t e of a c e r t i f i c a t e issued by t h e bank commissioner t h a t a l l d e p o s i t o r s and c r e d i t o r s have been paid i n f u l l and a l l o u t standing l i a b i l i t i e s have been s a t i s f i e d . (General S t a t u t e s of Connecticut, Revision of 1930, s e c . 3951). S e c u r i t i e s and money paid under bond because of d e f a u l t c o n s t i t u t e t r u s t fund. Any s e c u r i t y deposited with the S t a t e t r e a s u r e r , and any money which, i n c a s e of d e f a u l t , i s paid under any bond f i l e d by any p r i v a t e banker " s h a l l c o n s t i t u t e a t r u s t fund (1) f o r t h e benef i t of the d e p o s i t o r s of such p r i v a t e banker and the persons x?ho s h a l l d e l i v e r money t o such p r i v a t e banker f o r t r a n s m i s s i o n t o o t h e r s , which d e p o s i t o r s or persons s h a l l be p r e f e r r e d as t o such money and s e c u r i t i e s so deposited or recovered i n p r o p o r t i o n to t h e o b l i g a t i o n s of such private" banker t o them a r i s i n g out of such d e p o s i t s or r e c e i p t of money f o r t r a n s m i s s i o n and (2) f o r t h e benef i t of the g e n e r a l c r e d i t o r s of such p r i v a t e banker. 11 (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3951). r Real estate of person acting as surety on bond must be described and is sub.ject to a lien. Whenever the t r e a s u r e r accepts as s u r e t y on any bond any person owning r e a l e s t a t e "he s h a l l r e q u i r e such r e a l e s t a t e to be described i n such bond, and such r e a l e s t a t e s h a l l thereupon be s u b j e c t t o a l i e n t o the amount of t h e o b l i g a t i o n of such bond, which l i e n s h a l l take precedence over any subsequent incumbrance, except l i e n s f o r taxes or municipal a s s e s s m e n t s . " A c e r t i f i e d copy of the bond must be f i l e d and recorded i n the o f f i c e of the town c l e r k i n each town where such r e a l e s t a t e i s l o c a t e d , and a recording f e e t h e r e f o r must be paid by t h e p r i v a t e banker. (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3951). X-6812 - 13 Provisions not a p p l i c a b l e to c e r t a i n p e r s o n s , f i r m s , e t c . The p r o v i s i o n s r e l a t i n g to the deposit of a "bond w i t h the S t a t e " s h a l l not apply to any p e r s o n , f i r m , p a r t n e r s h i p , or unincorporated a s s o c i a t i o n of persons engaged s o l e l y i n the 'business of forwarding or t r a n s m i t t i n g money." (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3951). Statement of a s s e t s and l i a b i l i t i e s must "be f i l e d with t h e bank commissioner. Every p r i v a t e hank s h a l l "annually, on t h e f i r s t day of November or o f t en er i f r e q u i r e d by the commissioner, f i l e w i t h the bank commissioner a s t a t e m e n t , under oath, i n such form as may be r e quired by the commissioner, showing h i s a s s e t s and l i a b i l i t i e s , and giving such o t h e r i n f o r m a t i o n as may be r e q u i r e d by t h e commissioner. (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3954). Examinations; insolvency or p o s s i b i l i t y of l o s s t o d e p o s i t o r s ; bank commissioner may suspend o p e r a t i o n s . "The commissioner may cause an examination t o be made of t h e a f f a i r s of any p r i v a t e banker a t any time a t the expense of such p r i v a t e b a n k e r , and, i f a f t e r a p p r a i s i n g a l l the a s s e t s of such p r i v a t e banker, i n c l u d i n g loans on r e a l e s t a t e and any r e a l e s t a t e owned by such banker, he s h a l l f i n d t h a t such p r i v a t e banker i s i n s o l v e n t , or t h a t the d e p o s i t o r s or persons d e l i v e r i n g money to him f o r t r a n s mission a r e l i a b l e to s u f f e r any l o s s , he may d e l i v e r to such p r i v a t e banker a w r i t t e n n o t i c e to d i s c o n t i n u e r e c e i v i n g money from d e p o s i t o r s or money f o r t r a n s m i s s i o n and to d i s c o n t i n u e paying d e p o s i t o r s or other c r e d i t o r s . * * * The w r i t t e n order of t h e commissioner a u t h o r i z e d hereby s h a l l be i n e f f e c t a temporary i n j u n c t i o n r e s t r a i n i n g such p r i v a t e banker and h i s employees from r e c e i v i n g money from d e p o s i t o r s , or f o r t r a n s m i s s i o n , and from paying d e p o s i t o r s or other c r e d i t o r s u n t i l the same s h a l l be v a c a t e d by any order of t h e s u p e r i o r court or a judge t h e r e o f . " (General S t a t u t e s of Connecticut, Revision of 1930, s e c . 3955). Procedure to r e s t r a i n continuance i n business or to o b t a i n appointment of r e c e i v e r ; l i q u i d a t i o n . If the bank commissioner f i n d s t h a t t h e p r i v a t e banker i s i n solvent or t h a t the d e p o s i t o r s a r e l i a b l e t o s u f f e r a l o s s , he must then make an a p p l i c a t i o n to the superior court f o r the county i n which such banker i s l o c a t e d s e t t i n g f o r t h the f a c t s and circumstances and praying f o r t h e appointment of a r e c e i v e r or an i n j u n c t i o n r e s t r a i n ing such p r i v a t e banker from continuing i n b u s i n e s s . If i t appears to the c o u r t , a f t e r a h e a r i n g on the a p p l i c a t i o n , t h a t such p r i v a t e banker i s i n s o l v e n t or can not resume business with s a f e t y t o the publ i c , such court may i s s u e an i n j u n c t i o n r e s t r a i n i n g the p r i v a t e banker from f u r t h e r c a r r y i n g on b u s i n e s s , and, "if i n s o l v e n t , from c o l l e c t i n g X-6812 f i-.' 14 la 147 , "or r e c e i v i n g any debts or from paying out, s e l l i n g , a s s i g n i n g or t r a n s f e r r i n g any of the a s s e t s , moneys, funds or lands belonging t o him u n t i l the court s h a l l otherwise o r d e r . " The court a t the time of Ordering the i n j u n c t i o n , or a t any time during the continuance of such i n j u n c t i o n , may appoint a r e c e i v e r f o r the i n s o l v e n t p r i v a t e "banker. The r e c e i v e ? has the powers c o n f e r r e d by law upon r e c e i v e r s of i n s o l v e n t banks and t r u s t companies. The court may l i m i t the time f o r f i l i n g claims a g a i n s t such r e c e i v e r and the winding up of the busine ss of t h e p r i v a t e banker, "the l i q u i d a t i o n of h i s p r o p e r t y and a s s e t s and the d i s t r i b u t i o n of the a v a i l s thereof among t h e c r e d i t o r s of such p r i v a t e banker". (General S t a t u t e s of Connecticut, Revision of 1930, s e c t i o n 3955). D i s t r i b u t i o n of a s s e t s . The " a v a i l s " s h a l l be applied as f o l l o w s : (1) To the expenses of s e t t l i n g the a f f a i r s of the p r i v a t e banker; (2) to the payment of the d e p o s i t s and the money e n t r u s t e d t o the banker f o r t r a n s m i s s i o n ; (3) to the payment of a l l other l i a b i l i t i e s of the banker. The balance of such a v a i l s s h a l l be p a i d to such banker. (General S t a t u t e s of Connecticut, Revision of 1930, s e c . 3955). • Receiver r e q u i r e d t o f i l e bond. The r e c e i v e r must f i l e a bond i n such form and i n such amount as the court may d i r e c t b e f o r e t a k i n g c o n t r o l of the a s s e t s of any p r i v a t e banker. (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3955). Additional p r o v i s i o n s regarding power of "bank commissioner and s u p e r i o r court to suspend b u s i n e s s i n order to p r e s e r v e a s s e t s or p r o t e c t d e p o s i t o r s . "The commissioner may i s s u e a temporary order r e s t r a i n i n g any *** p r i v a t e banker *** from paying out any funds *** or r e c e i v i n g d e p o s i t s , or may take p o s s e s s i o n of *** such p r i v a t e "banker's business u n t i l such time as a hearing may be arranged b e f o r e a judge of t h e superior c o u r t , who may, upon a p p l i c a t i o n of the commissioner, *** or p r i v a t e banker, whenever, i n the opinion of such commissioner, *** or p r i v a t e banker, i t may be necessary to p r e s e r v e a s s e t s or p r o t e c t d e p o s i t o r s , make an order r e s t r a i n i n g any *** p r i v a t e banker from paying out the funds of such *** p r i v a t e banker, or any p o r t i o n t h e r e o f , or from d e c l a r i n g or paying dividends on any d e p o s i t s or c a p i t a l stock f o r such time as such judge s h a l l deem necessary. Such order s h a l l be i n w r i t i n g d i r e c t e d t o the *** p r i v a t e banker t o be a f f e c t e d t h e r e b y , and a copy of the o r d e r . a t t e s t e d and l e f t by the commissioner *** with such p r i v a t e banker s h a l l be s u f f i c i e n t n o t i c e t h e r e o f . Before i s s u i n g such r e s t r a i n i n g o r d e r , the judge s h a l l cause reasonable n o t i c e t o be given to the *** p r i v a t e banker to be a f f e c t e d t h e r e b y . *** n o t i c e t o an agent of any p r i v a t e "banker s h a l l be n o t i c e t o such p r i v a t e banker. Notice may be waived by any such *** p r i v a t e banker or a g e n t . Before *** any p r i v a t e banker s h a l l apply to any judge f o r such X-6812 * • 1 6 it " r e s t r a i n i n g o r d e r , n o t i c e s h a l l be given i n w r i t i n g to t h e "bank commissioner of i n t e n t i o n to so apply at l e a s t t e n days "before such app l i c a t i o n s h a l l "be made. I f , i n the opinion of the bank commissioner, (or) p r i v a t e "banker *** such order should "be revoked or m o d i f i e d , any judge of t h e s u p e r i o r court may, on a p p l i c a t i o n of such commissioner, (or) p r i v a t e "banker *** revoke or modify the o r i g i n a l o r d e r , and n o t i c e of such r e v o c a t i o n o r m o d i f i c a t i o n s h a l l "be given to the *** p r i v a t e "banker a f f e c t e d thereby i n the same manner as i n the case of the o r i g i n a l o r d e r . " (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3870). Annual f e e mast "be p a i d "bank commissioner. Every p r i v a t e "banker i s r e q u i r e d t o pay annually to the "bank commissioner a f e e of f i f t y d o l l a r s . (General S t a t u t e s of Connecticut, Revision of 1930, s e c . 3957). Purchase of r e a l e s t a t e without approval of "bank commissioner p r o h i b i t e d . "No p r i v a t e banker doing b u s i n e s s i n t h i s s t a t e *** s h a l l p u r chase any r e a l e s t a t e without f i r s t o b t a i n i n g the approval of the bank commissioner." (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3952). Reserve fund r e q u i r e d . "Each such p r i v a t e banker s h a l l maintain a r e s e r v e fund of twelve per centum of t h e demand d e p o s i t s and f i v e per centum of the time d e p o s i t s h e l d by him." (General S t a t u t e s of Connecticut, Revision of 1930, s e c t i o n 3953). What r e s e r v e fund s h a l l c o n s i s t o f . "Such r e s e r v e fund s h a l l c o n s i s t of gold and s i l v e r c o i n , the demand o b l i g a t i o n s of the United S t a t e s or n a t i o n a l bank currency or f e d e r a l r e s e r v e notes and f e d e r a l r e s e r v e bank notes and be held by such p r i v a t e banker i n h i s p l a c e of business and of balances w i t h r e serve a g e n t s , s u b j e c t to demand d r a f t or bonds which a r e l e g a l i n v e s t ments £>r savings banks of t h i s s t a t e , provided each such r e s e r v e agent s h a l l be a d e p o s i t o r y approved by t h e bank commissioner; and the bonds, held as a p a r t of such r e s e r v e , s h a l l , at no time, exceed a t p a r value o n e - s i x t h of the t o t a l r e s e r v e f u n d . " (General S t a t u t e s of Connecticut Revision of 1930, s e c . 3953). Dividends or new l o a n s , d i s c o u n t s , e t c . , p r o h i b i t e d while r e s e r v e i s impaired. Whenever the r e s e r v e fund of any p r i v a t e banker f a l l s belcw the requirements, such banker i s p r o h i b i t e d from making any new l o a n s , discounts or i n v e s t m e n t s , or any dividend or d i s t r i b u t i o n of p r o f i t s ! X*»6812 - 149 16 - u n t i l the r e s e r v e fund i s r e s t o r e d to the r e q u i r e d amount. S t a t u t e s , o f Connecticut, Revision of 1930, s e c . 3953). (General Duty of bank commissioner i n case of impaired r e s e r v e fund. "The hank commissioner s h a l l n o t i f y any p r i v a t e "banker whose r e serve fund s h a l l f a l l "below s a i d r e q u i r e d amount, and, i f such p r i v a t e "banker s h a l l f a i l f o r t h i r t y days t h e r e a f t e r t o make good such r e s e r v e f u n d , the "bank commissioner may apply f o r the appointment of a r e c e i v e r to wind up h i s business. 1 1 (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3953). D e f i n i t i o n of permanent c a p i t a l . "Any r e a l e s t a t e , s e c u r i t y , personal p r o p e r t y or evidence of ownership of p r o p e r t y acquired by any unincorporated p r i v a t e banker, with t h e c a p i t a l of such banker and cash received on deposit i n excess of the t o t a l l i a b i l i t i e s of such banker, s h a l l be construed and designated as permanent c a p i t a l . " (General S t a t u t e s of Connecticut, Rev i s i o n of 1930, sec. 3960). Investment of permanent c a p i t a l . • "Bach such banker may, subject t o the r e s t r i c t i o n s provided f o r h e r e i n , i n v e s t h i s permanent c a p i t a l and the d e p o s i t s r e c e i v e d i n such r e a l and p e r s o n a l p r o p e r t y , as he may deem a d v i s a b l e , p r o v i d ed the s e c u r i t y a f f o r d e d d e p o s i t o r s s h a l l not be imperiled by any such i n v e s t m e n t , n (General S t a t u t e s of Connecticut, Revision of 1930, s e c . 3960). Restriction upon lending permanent c a p i t a l t o c e r t a i n c o r p o r a t i o n s . "No p r i v a t e banker s h a l l lend, d i r e c t l y or i n d i r e c t l y , t o any corporation of which he i s t h e l e g a l or e q u i t a b l e owner of more than twunty-five p e r centum of the issued c a p i t a l stock, any p a r t of his permanent c a p i t a l or c a p i t a l stock or the d e p o s i t s received by him." (General S t a t u t e s of Connecticut, Revision of 1930, s e c . 3961). Location of p r o p e r t y upon which loans a r e made. A l l r e a l p r o p e r t y and mortgage loans held by any p r i v a t e banker on May 29, 1925, or acquired with c a p i t a l or d e p o s i t s , or t o which t i t l e has been taken i n connection with the business of t h e p r i v a t e banker, must be l o c a t e d i n t h e S t a t e of Connecticut, or i n c e r t a i n c o u n t i e s of the S t a t e s of Rhode I s l a n d , Massachusetts or New York. (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3962). Real e s t a t e loans p r o h i b i t e d i f aggregate amount exceeds 80# of appraised value of p r o p e r t y . "No p r i v a t e banker s h a l l make a loan, d i r e c t l y or i n d i r e c t l y , X-6812 * 1 ? ik "upon the s e c u r i t y of r e a l e s t a t e i f the t o t a l amount of mortgages, l i e n s and encumbrances upon such r e a l e s t a t e , i n c l u d i n g t h e mortgage loan t o be made by such p r i v a t e banker, s h a l l , i n the aggregate amount, exceed eighty per centum of the appraised value of such r e a l e s t a t e . " (General S t a t u t e s of Connecticut, Revision of 1930, s e c . 3963). Branch or new p l a c e of b u s i n e s s p r o h i b i t e d , but l o c a t i o n i n same town may be changed. "No p r i v a t e banker s h a l l e s t a b l i s h any branch or open any new p l a c e of b u s i n e s s , provided nothing h e r e i n contained s h a l l prevent the change of l o c a t i o n of the p l a c e of business of any p r i v a t e banker w i t h i n t h e town i n which such b u s i n e s s i s l o c a t e d , but nothing h e r e i n contained s h a l l permit t h e change of l o c a t i o n of such business from one town t o a n o t h e r . " (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3959). Penalties for violations. Any person v i o l a t i n g any of the above p r o v i s i o n s "or of any other s t a t u t e concerning the r e g u l a t i o n of p r i v a t e bankers or concerning persons engaged i n the business of r e c e i v i n g money f o r forwarding or t r a n s m i s s i o n , s h a l l be f i n e d not more than two thousand d o l l a r s or imprisoned not more than one year or b o t h . " (General S t a t u t e s of Connectic u t , Revision of 1930, sec. 3967). P r i v a t e bankers may i n c o r p o r a t e ; conditions p r e c e d e n t . "Any p e r s o n , f i r m or unincorporated a s s o c i a t i o n of p e r s o n s , engaged on May 29, 1925, i n t h e business of p r i v a t e banker ***, may i n c o r p o r a t e , f o r t h e purpose of conducting such b u s i n e s s , i n t h e manner p r o vided by law f o r t h e o r g a n i z a t i o n of j o i n t stock c o r p o r a t i o n s , except as provided h e r e i n . The by-laws of any p r i v a t e banker i n c o r p o r a t i n g *** s h a l l be submitted t o the bank commissioner f o r approval, and no by-laws s h a l l be adopted u n l e s s the same s h a l l have been approved by him. Any such person, f i r m or a s s o c i a t i o n intending t o i n c o r p o r a t e f o r the purpose of t r a n s a c t i n g such b u s i n e s s s h a l l serve n o t i c e upon t h e commissioner of h i s i n t e n t i o n to i n c o r p o r a t e , and s h a l l f u r n i s h evidence t o t h e commissioner t h a t the c a p i t a l stock of such c o r p o r a t i o n t o the amount of a t l e a s t t w e n t y - f i v e thousand d o l l a r s s h a l l have beensubscribed f o r , w i t h c a p i t a l s t o c k s h a l l not be invested i n s e c u r i t i e s d e p o s i t e d with the s t a t e t r e a s u r e r i n l i e u of a bond to t h e s t a t e . " (General S t a t u t e s of Connecticut, Revision of 1930, sec. 3964), DELAWARE Banking b u s i n e s s must be conducted under corporate c h a r t e r . " I t s h a l l be unlawful t o conduct a banking b u s i n e s s or t h e b u s i ness of a t r u s t company w i t h i n t h i s S t a t e except under a c o r p o r a t e 151 18 - X-6812 " c h a r t e r v a l i d i n t h i s S t a t e a u t h o r i z i n g the conduct df such "business i n t h i s S t a t e . " (Act approved March 31, 1921, Laws of 1921, s e c . 2; Banking Laws, 1929, s e c . 2, p . 15). "ITo bank or t r u s t company n o t a c t i v e l y engaged i n b u s i n e s s i n t h i s S t a t e a t the time of the adoption of t h i s Act s h a l l open a p l a c e of business i n t h i s S t a t e without having f i r s t secured from t h e S t a t e Baiik Commissioner a c e r t i f i c a t e t h a t i t has complied '?ith a l l the requirements of law and t h a t i t i s a u t h o r i z e d t o conduct the b u s i n e s s s p e c i f i e d t h e r e i n . " (Act approved March 31, 1921, Laws of 1921, s e c . 3; Banking Laws, 1929, s e c . 3, p . 15). Forming banking company without i n c o r p o r a t i o n ; p e n a l t y . " I t i s u n l a w f u l f o r any persons to a s s o c i a t e i n forming a banki n g cosipany without i n c o r p o r a t i o n ; and any persons who s h a l l r e c e i v e s u b s c r i p t i o n s to t h e c a p i t a l stock of such company, or s h a l l s u b s c r i b e f o r s h a r e s t h e r e i n , s h a l l f o r f e i t and pay f i v e hundred d o l l a r s t o anyone '"ho w i l l sue f o r the same; one-half thereof f o r the use of the S t a t e . " (Rev. Code of D e l . , 1915, s e c . 2102; Banking Laws, 1929, s e c . 2102, p . 31.) Unauthorized banking o p e r a t i o n s or a d v e r t i s i n g ; p e n a l t i e s . "If any persons, members, or agents, of such (unincorporated banking) a s s o c i a t i o n , s h a l l issue any "bills, or notes, i n the nature of bank notes, payable to bearer or order, or loan money upon actual or accommodation notes, or receive money on deposit, every such person s h a l l f o r f e i t and pay f i v e h%idred d o l l a r s , to be recovered and applied" as provided i n the p r o v i s i o n l a s t above quoted. (Rev. Code of D e l . , 1915, s e c . 2103; Banking Laws, 1929, s e c . 2103, p . 31). "Any person, f i r m , or a s s o c i a t i o n of i n d i v i d u a l s * * *, who s h a l l i n any manner r e p r e s e n t or hold out him, h e r , themselves or i t s e l f , whether by public a d v e r t i s e ment, p l a c a r d , hand b i l l or otherwise, as engaged i n the r e c e i p t of dep o s i t s of money as a savings fund, bank or t r u s t company or any business s u b s t a n t i a l l y s i m i l a r t h e r e t o w i t h i n the boundaries of the S t a t e of Delaware, not being a u t h o r i z e d under the laws of t h i s S t a t e to engage i n such b u s i n e s s or any b u s i n e s s s u b s t a n t i a l l y s i m i l a r t h e r e t o , s h a l l be deemed g u i l t y of a misdemeanor, and upon conviction thereof s h a l l be f i n e d i n a sum not exceeding two hundred d o l l a r s or imprisoned f o r a term not exceeding one y e a r , or b o t h , a t the d i s c r e t i o n of the Court." (Rev. Code of D e l . , 1915, s e c . 3507; Banking Laws, 1929, s e c . 3507, p . DISTRICT 0? COLUMBIA. ITo p r o h i b i t i o n a g a i n s t "private banking b u s i n e s s , and, except f o r t a x a t i o n p r o v i s i o n s , no o t h e r p r o v i s i o n s a p p l i c a b l e . .The laws of the D i s t r i c t of Columbia do not contain any p r o v i s i o n s p r o h i b i t i n g the t r a n s a c t i o n of a banking business by a p r i v a t e bank; nor do such laws contain any p r o v i s i o n s covering the o p e r a t i o n or s u p e r v i s i o n of such a bank. The laws, however, do contain p r o v i s i o n s -19- X-6812 d e f i n i n g a p r i v a t e "bank and Subjecting i t to ''a tax of f i v e hundred d o l l a r s per annum". These p r o v i s i o n s are given below. Hate of t a x a t i o n : "-private bank or "banker" d e f i n e d . " P r i v a t e banks or bankers not incorporated s h a l l pay a tax of : f i v e hundred d o l l a r s per annum. Every person, f i r m , company, or a s s o c i a t i o n not i n c o r p o r a t e d having a p l a c e of business where c r e d i t s a r e opened by the d e p o s i t or c o l l e c t i o n of moneys or currency s u b j e c t , t o be p a i d or r e m i t t e d upon d r a f t , check, or order, or where money i s advanced or loaned on s t o c k s , bonds, b u l l i o n , b i l l s of exchange, or promissory n o t e s , or ?here s t o c k s , bonds, b i l l s of exchange or promissory notes are r e c e i v e d f o r discount or f o r s a l e , s h a l l be regarded as a p r i v a t e bank or banker." (Act of J u l y 1, 1902, 32 S t a t s . 621, ch. 1352, s e c . 5, p a r . 14; Code of t h e D i s t r i c t of Columbia, T i t l e 20, s e c . 765, p . 255.) When tax mast be p a i d . "The taxes f o r s a i d p r i v a t e banks and bankers, and note brokers s h a l l be p a i d t o the c o l l e c t o r of taxes of the D i s t r i c t of Columbia, and s h a l l date from t h e f i r s t day of J u l y i n each year aaa e x p i r e on the t h i r t i e t h day of June following. Said taxes s h a l l date from the f i r s t day of the month i n which the l i a b i l i t y begins, and payment s h a l l be made f o r a p r o p o r t i o n a t e amount." (Act of J u l y 1, 1902, 32 S t a t s . 622, ch. 1352, s e c . 6, p a r . 17; Code of the D i s t r i c t of Columbia, T i t l e 20, s e c . 768, p . 253). FLORIDA. P r i v a t e banking b u s i n e s s -prohibited. Under the terms of a s t a t u t e of t h i s S t a t e enacted i n 1915, i t i s provided t h a t , except f o r p e r s o n s , firms or companies which were conducting a p r i v a t e banking business on or b e f o r e June 4, 1915, "no person, f i r m or company s h a l l be allowed to conduct a banking business i n t h i s S t a t e without being i n c o r p o r a t e d under the banking laws of t h i s S t a t e . " (Acts of 1915, ch. 6812, s e c . 1; Banking laws, 1930, A r t i c l e 14, s e c . 4202, p . 5 5 ) . Persons, f i r m s or companies conducting a p r i v a t e banking b u s i ness as of June 4, 1915, could have been p e r m i t t e d by the Comptroller of the S t a t e , up to ITovember 1, 1915, to continue such business i f they had a c a p i t a l of $15,000; but i f a u t h o r i t y to continue i n business had not been obtained p r i o r to. ITovember 1, 1915, the laws r e q u i r e d t h a t a r e c e i v e r be appointed for such p r i v a t e banks. For p r i v a t e banks vhich were a u t h o r i z e d to continue i n b u s i n e s s , the laws provide t h a t they " s h a l l be governed and c o n t r o l l e d by the Banking Laws of t h i s S t a t e , i n so f a r as the same may be a p p l i c a b l e , as f u l l y and completely as i f i n c o r p o r a t e d as a banking company, and s h a l l be s u b j e c t to a l l the p e n a l t i e s of s a i d laws, and to t h e s u p e r v i s i o n , c o n t r o l and d i r e c t i o n of the Comptroller." (Acts of 1915, ch. 6812, s e e s . , 2 , 3 , 4 and 5; Banking Laws, 1930, A r t i c l e 14, s e e s . 4203,4205 and 4206, pp.55 and 56). - 20 w : 153 X-S812 m^iA ITo p r o v i s i o n s covering operation except r e s t r i c t i o n s a g a i n s t u s i n g c e r t a i n a d v e r t i s i n g or banking terms I" - -• "Mo p r i v a t e person, f i r m , or voluntary a s s o c i a t i o n engaged i n the business of banking i n t h i s S t a t e not s u b j e c t to the s u p e r v i s i o n of t h e Superintendent of Banks, and no p r i v a t e corporation except a bank duly c h a r t e r e d and organized under the laws of t h i s S t a t e or under the Acts of Congress" s h a l l make use of any a d v e r t i s i n g importing a corp o r a t i o n or i n d i c a t i n g t h a t the b usiness engaged i n i s t h a t of r e g u l a r l y c h a r t e r e d bank. P r i v a t e banks are a l s o p r o h i b i t e d from u s i n g the words "bank", "banker", "banking company", "banking house", or any other s i m i l a r words i n d i c a t i n g t h a t t h e business done i s t h a t of a bank, without a l s o u s i n g therewith the words " p l a i n l y w r i t t e n or p r i n t e d , so t h a t the same may be r e a d i l y read, ' P r i v a t e Bank, 2*ot I n c o r p o r a t e d ' , and every person, firm, a s s o c i a t i o n , or p r i v a t e corporation other than a r e g u l a r l y c h a r t e r e d bank, a d v e r t i s i n g t o r e c e i v e , or r e c e i v i n g d e p o s i t s , s h a l l a t the window or desk a t which such d e p o s i t s are received p l a c e , a conspicuous sign *>ith l e t t e r s not l e s s than one inch i n h e i g h t , upon which s h a l l be p r i n t e d the words, ' P r i v a t e Banker, i'ot I n c o r p o r a t e d ' P r i v a t e bankers engaged i n business a t the time of the passage of the a c t containing t h e s e p r o v i s i o n s (August 16, 1919) are not r e q u i r e d to change the names i n use by them and "may continue to u s e , without f u r t h e r q u a l i f i c a t i o n or r e s t r i c t i o n , the word 'Banker' or ' B a n k e r s ' , "here the use of t h e i r names conveys unmistakably t h a t they are not i n c o r p o r a t e d . " (Banking Law Pamphlet, with amendments to August 26, 1925, A r t i c l e 1, s e c . 4, pp. 3 and 4 . ) A v i o l a t i o n of these p r o v i s i o n s cons t i t u t e s a misdemeanor. (Banking Law Pamphlet, with amendments to August 26, 1925, A r t i c l e 20, s e c . 35, p . 9 5 ) . P r i v a t e bank may be converted i n t o a bank. The laws of t h i s S t a t e a l s o contain p r o v i s i o n s permitting a p r i v a t e bank to convert i n t o a bank upon complying with the laws covering the i n c o r p o r a t i o n of banks. (Banking Law Pamphlet, with amendments to August 26, 1925, A r t i c l e 11, s e e s . 1 to 3 i n c l u s i v e , pp. 47 and 4 8 . ) IDAHO P r i v a t e banking -prohibited: but c e r t a i n p r i v a t e bankers ma.v continue in business. The laws of t h i s S t a t e provide t h a t " i t s h a l l be unlawful f o r any c o r p o r a t i o n , p a r t n e r s h i p , f i r m or i n d i v i d u a l to engage i n or t r a n s a c t a banking or banking and t r u s t business w i t h i n t h i s s t a t e except by means of a c o r p o r a t i o n duly organized f o r such purpose, except t h a t any i n d i v i d u a l , c o - p a r t n e r s h i p or unincorporated a s s o c i a t i o n a c t u a l l y t r a n s a c t i n g a banking or banking and t r u s t business as h e r e i n d e f i n e d w i t h i n t h i s s t a t e on the d a t e t h i s a c t becomes e f f e c t i v e , may continue i n such X-6812 ' 154 U 21 - "business a t t h e p l a c e s where tl>ey a r e then l o c a t e d , under and subjeet to the p r o v i s i o n s of t h i s actt•' (Banking Laws, 1925, sec. 2, p . 5; Idaho Bankifig Code, 1925, ch; 133 i sec. 2 . ) The word "bank", as used i n t h e s e laws, " s h a l l be construed to include any I n d i v i d u a l , c o - p a r t n e r s h i p , or u n i n c o r p o r a t e d a s s o c i a t i o n engaged i n the banking busine ss as h e r e i n defined. 1 1 (Banking Laws, 1925, sec, 2, p. 5; Idaho Banking Code, 1925, ch. 133, s e c . 2 ) . D e f i n i t i o n of banking b u s i n e s s . "The s o l i c i t i n g , r e c e i v i n g or accepting of money or i t s equival e n t on d e p o s i t as a r e g u l a r business s h a l l be deemed t o be doing a banking b u s i n e s s , whether such deposit i s made s u b j e c t t o check, or i s evidenced by a c e r t i f i c a t e of d e p o s i t , a passbook, a n o t e , a r e c e i p t , or other w r i t i n g ; P r o v i d e d . t h a t nothing h e r e i n s h a l l apply to or i n clude money or i t s equivalent l e f t i n escrow or l e f t w i t h t h e agent pending investment i n r e a l e s t a t e or s e c u r i t i e s f o r or on account of h i s p r i n c i p a l . (Banking Laws, 1925, sec. 2, p. 5; Idaho Banking Code, 1925, ch. 133, s e c . 2 . ) Banking b u s i n e s s must be authorized by law; p e n a l t y . " I t s h a l l be unlawful f o r any i n d i v i d u a l , c o p a r t n e r s h i p , a s s o c i a t i o n , f i r m or c o r p o r a t i o n to r e c e i v e money upon deposit or t r a n s a c t any other form of banking b u s i n e s s except as authorized by t h i s a c t . Any person v i o l a t i n g any p r o v i s i o n of t h i s s e c t i o n , e i t h e r i n d i v i d u a l l y or as an i n t e r e s t e d p a r t y i n any c o - p a r t n e r s h i p , a s s o c i a t i o n , f i r m or c o r p o r a t i o n , s h a l l be g u i l t y of a misdemeanor and upon c o n v i c t i o n thereof s h a l l be f i n e d i n t h e sum of not l e s s than $300 nor more than $1,000, or by imprisonment i n the county j a i l not l e s s than t h i r t y days nor more than one y e a r , o r by both f i n e arid imprisonment." (Banking Laws, 1925, sec. 102, p . 47; Idaho Banking Code, 1925, ch. 133, sec. 102). A d v e r t i s i n g banking b u s i n e s s not authorized by law; p e n a l t y . "Any p e r s o n , f i r m , or c o r p o r a t i o n , other than a n a t i o n a l bank, not a u t h o r i s e d t o do a banking or t r u s t busine ss under t h i s a c t , t h a t uses or a d v e r t i s e s as p a r t of h i s or i t s f i r m or c o r p o r a t e name the word ' b a n k ' , ' b a n k e r ' , ' t r u s t company', 'savings b a n k ' , or any other word or words of s i m i l a r import, i s g u i l t y of a f e l o n y . Provided, however, t h i s s e c t i o n s h a l l not apply to t i t l e or t r u s t companies i n c o r p o r a t e d under Chapter 194 of the Idaho Compiled S t a t u t e s 1919, nor to any company which p r i o r t o t h e passage of t h i s act has l a w f u l l y assumed and used as a p a r t of i t s name the word ' t r u s t . ' or ' t r u s t c o m p a n y ' ( B a n k i n g Laws, 1925, sec. 103, p . 47; Idaho Banking Code, 1925, ch. 133, s e c . 103.) ILLINOIS Banking b u s i n e s s f o r b i d d e n t o n a t u r a l p e r s o n s , f i r m s or p a r t n e r s h i p s . "After January 1, 1921 no n a t u r a l person or n a t u r a l p e r s o n s , f i r m or p a r t n e r s h i p s h a l l t r a n s a c t the b u s i n e s s of banking or the b u s i ness of r e c e i v i n g money upon d e p o s i t , or s h a l l use the word 'Bank' or 'Banker' i n connection with s a i d b u s i n e s s ; provided, t h a t nothing h e r e i n X-6812 1 155 22 — contained s h a l l "be construed to p r o h i b i t tanks Incorporated, under the laws of t h i s S t a t e or of the United S t a t e s from appointing n a t u r a l p e r sons as agents t o r e c e i v e d e p o s i t s of savings i n and through t h e p u b l i c schools. 1 1 (Act of June 4, 1929, sec. 15&; Laws of 1929, s e c , 15s $ P* 188, made e f f e c t i v e by popular vote as of December 2, 1930.) Penalty f o r v i o l a t i o n . "Any person or persons v i o l a t i n g t h i s s e c t i o n s h a l l be deemed g u i l t y of a misdemeanor and s h a l l , upon c o n v i c t i o n t h e r e o f , be punished by a f i n e of not more than one thousand d o l l a r s ($1,000) or by imprisonment i n the county j a i l f o r not more than one (1) y e a r , or by both such f i n e and imprisonment, and the Attorney General or S t a t e ' s a t t o r n e y of the county i n which any such v i o l a t i o n occurs may r e s t r a i n such v i o l a t i o n by a b i l l i n e q u i t y to be f i l e d i n the C i r c u i t Court of such county." (Act of June 4, 1929, sec. 15^; Laws of 1929, sec. 15&, p . 188, made e f f e c t i v e by popular v o t e as of December 2, 1930.) (Note,: — Sec. 15& of the I l l i n o i s Laws of 1929, as i t appeared i n the laws of 1919, p . 235, p r o h i b i t e d the t r a n s a c t i n g of t h e business of t r a n s m i t t i n g money t o f o r e i g n c o u n t r i e s and buying and s e l l i n g f o r e i g n money or r e c e i v i n g money on d e p o s i t t o be t r a n s m i t t e d to f o r e i g n c o u n t r i e s (express, steamship and t e l e g r a p h companies excepted). The Supreme Court of I l l i n o i s i n the case of Wedesweiler v s . Brundage, 297 111. 228, 130 U.B. 520, (April 5, 1921) held t h a t t h e s e r e s t r i c t i o n s rendered the s e c t i o n u n c o n s t i t u t i o n a l on t h e grounds t h a t i t embraced a s u b j e c t not mentioned i n the t i t l e of t h e a c t , t h a t i t granted a s p e c i a l p r i v i l e g e i n v i o l a t i o n of sec. 22 of A r t . IV of t h e I l l i n o i s Constitution, t h a t i t deprived the Appellees of t h e r i g h t t o continue the business i n which they were engaged without due process of law, and t h a t i t deprived them of equal p r o t e c t i o n of t h e laws i n v i o l a t i o n of Sec. 2, A r t . I I of t h e S t a t e C o n s t i t u t i o n and of Sec. 1 of the 14th Amendment t o the Federal C o n s t i t u t i o n . The court f u r t h e r held t h a t , i n the absence of a s t a t u t e , the r i g h t of an i n d i v i d u a l to engage i n the banking business i n a l l or any of i t s departments i s u n r e s t r i c t e d , but t h a t t h e business i s of a p u b l i c c h a r a c t e r and i s p r o p e r l y s u b j e c t to s t a t u t o r y r e g u l a t i o n s f o r t h e p r o t e c t i o n of the p u b l i c ; and, t h a t an i n d i v i d u a l i s not engaged i n the banking b u s i n e s s because he does some of the t h i n g s which a r e f r e q u e n t l y or u s u a l l y done by banks, such as loaning money and t a k i n g bonds and mortgages t h e r e f o r and i n t r a n s m i t t i n g money to f o r e i g n c o u n t r i e s or buying and s e l l i n g f o r e i g n exchange. This case i s c i t e d f o r the purpose of showing t h a t the scope of t h e p r e s e n t s e c t i o n appears t o be somewhat l i m i t e d . ) IMDIAHA P r i v a t e banks must be authorized to t r a n s a c t banking b u s i n e s s . " I t s h a l l be unlawful f o r any i n d i v i d u a l , ( o r ) f i r m *** to X-68]|2 J_50 -38 . h e r e a f t e r engage in a "banking b u s i n e s s a f t e r the enactment of t h i s act (1915) without f i r s t r e c e i v i n g from the ( S t a t e ) c h a r t e r board the approval of t h e i r a p p l i c a t i o n When in the judgment of s a i d c h a r t e r board i t i s a d v i s a b l e to mate a personal i n v e s t i g a t i o n as to the need and n e c e s s i t y of e s t a b l i s h i n g (a) * * * p r i v a t e bank, * * * , then the board may appoint some person to make a thorough i n v e s t i g a t i o n , and s a i d person s h a l l make a w r i t t e n r e p o r t of h i s f i n d i n g s and f i l e same with the c h a r t e r board; *** " . (Acts of 1915, sec. 3, p . 550; Banking Laws, 1929, sec. 3, p . 77.) P e n a l t y f o r v i o l a t i o n of above •provision. "Any person v i o l a t i n g the provision of t h i s (above quoted) sect i o n e i t h e r i n d i v i d u a l l y or a s an i n t e r e s t (ed) p a r t y , s h a l l be g u i l t y of a misdemeanor, and upon conviction t h e r e o f " , s h a l l be s u b j e c t to c e r t a i n p r e s c r i b e d p e n a l t i e s . (Acts of 1915, sec. 3, p . 550; Banking Laws, 1929, sec. 3, p . 77). - 54 • ' AbpMo&bility o f . 1 9 0 ^ X-6812 * - ! I Thfe Act of 1907, provides "That every partnership, firm or i n dividual transacting a "banking "business within t h i s s t a t e , or u s i n g the word bank, "banker, or "banking i n connection with hi6 or i t s "business, s h a l l be subject to the provisions of this act." (Acts of 1907, s e c . 1, p . 174; Banking laws, 1929, sec. 1, p . 43.) Capital required: investment of: segregation of "It s h a l l be unlawful f o r any partnership, firm or individual to transact a banking business in t h i s s t a t e , or to advertise as a banker u n l e s s said partnership, firm or individual has a t l e * s t ten thousand ($10,000) d o l l a r s of cash capital invested i n well secured notes i n s t a t e or municipal bonds, or i n bank building, furniture or f i x t u r e s , and shall be s e t apart for the security of the creditors of s a i d bank; * * (Acts of 1907, p . 174, sec. 2; Banking Laws, 1929, s e c . 2, p. 43.) Real e s t a t e investments; r e s t r i c t i o n s upon and conditions regarding. " * * * not more than o n e - t h i r d of the c a p i t a l * * * f i x e d i n the d e t a i l e d statement of such p a r t n e r s h i p , f i r m , or i n d i v i d u a l s h a l l be i n vested i n r e a l e s t a t e : * * I f any p a r t i s i n v e s t e d i n r e a l e s t a t e , the r e a l e s t a t e mast be conveyed to the p r i v a t e bank i n i t s own name by a deed signed and acknowledged by the members of the bank and t h e i r ? wives. The deed must give a d e s c r i p t i o n of the r e a l e s t a t e and i t s v a l u e , must convey a good f e e simple t i t l e , s h a l l be recorded i n the r e c o r d e r ' s o f f i c e of the county where the land i s l o c a t e d and "a copy thereof f i l e d with the bank commissioner; Provided, That no p a r t of the c a p i t a l , s u r p l u s or undivided p r o f i t s of said bank, except as a f o r e s a i d , may be i n v e s t e d i n r e a l e s t a t e except i t be taken i n settlement of a d o u b t f u l claim, or purchased a t j u d i c i a l s a l e on a Judgment or a decree of f o r e c l o s u r e i n favor of s a i d bank; and when so taken, i t must be by deed made to such; and the president and cashier of such bank are hereby empowered and a u t h o r i z e d to execute good and s u f f i c i e n t deed or deeds t h e r e f o r , in the name of such bank, upon proper order made t h e r e f o r by the board of directors of such bank. All mortgages held by or to secure money loaned by the bank ehe^l be s a t i s f i e d of record upon the payment thereof, by a release or s a t i s f a c t i o n of mortgage executed i n the name of the bank by i t s president, v i c e president or cashier," (Acts of 1907, P" 1 ? 4 » sec. 2; Banking laws, 1929, s e c . 2, pp. 43 and 4 4 . ) Increase or decrease of capital storfr. The c a p i t a l s t o c k of any p r i v a t e banker may be increased by an agreement i n w r i t i n g signed by the p a r t n e r s or owners holding two t h i r d s of t h e c a p i t a l s t o c k and "paying i n t o the bank i n money the amount of the i n c r e a s e . This amount and a c e r t i f i c a t e by the cashier or manager of the bank of i t s payment, s h a l l , w i t h i n f i v e days t h e r e a f t e r , be f i l e d with the bank commissioner. The c a p i t a l stock may be decreased but a t no time below $10,000, upon a w r i t t e n p e t i t i o n of the p a r t n e r s or owners — 25 — ; 158 X-6812 holding t w o - t h i r d s of the c a p i t a l stock to the bank commissioner. The hank commissioner, a f t e r an ex&itiija&lion df the bank may approve or r e f u s e the r e d u c t i o n . If approved,' t h a t f a c t must toe indorsed upon the p e t i t i o n , and n o t i c e of such reduction mast immediately be p u b l i s h e d f o r t h i r t y days in some newspaper published in the town where the bank i s l o c a t e d , o r , i f no newspaper i s published in the town, then in one published a t the county s e a t . (Acts of 1907, p . 174, sec. 2; Banking Laws, 1929, sec. 2, p . 44). Statement r e q u i r e d to be f i l e d . Every p r i v a t e banker i s r e q u i r e d to f i l e with t h e bank commissioner a d e t a i l e d sworn statement o f ; First. The name of t h e bank. Second. A copy of the a r t i c l e s of copartnership or agreement under which the b u s i n e s s i s being, or i s to be conducted, which s h a l l be executed and acknowledged by a l l the p a r t i e s i n t e r e s t e d i n t h e bank, and a t l e a s t one of whom s h a l l be a r e s i d e n t of t h e S t a t e of Indiana. If a bank b u s in e s s i s b e i n g or i s to be t r a n s a c t e d or c a r r i e d on by an i n d i v i d u a l , such i n d i v i d u a l mast be a r e s i d e n t of the S t a t e of Indiana, and the statement mast so show. Third. The county and c i t y or town in which the bank i s to be l o c a t e d , and the b u s i n e s s c a r r i e d on. Fourth. The amount of the c a p i t a l p a i d into the b u s i n e s s and to be kept and maintained a t a l l times in the b u s i n e s s . F i f t h . That t h e aggregate r e s p o n s i b i l i t y and net worth of the i n d i v i d u a l members of such f i r m , p a r t n e r s h i p or i n d i v i d u a l i s equal to an amount a t l e a s t double the amount of the c a p i t a l p a i d i n t o the bank. S i x t h . The names of the o f f i c e r s who a r e to manage the b u s i n e s s . (Acts of 1907, p. 174, sec. 3; Banking Laws, 1929, sec. 3, p . 44). C e r t i f i c a t e s of stock must be issued to i n d i v i d u a l s forming bank and deemed c a p i t a l stock. ' ' •'' ' • ' -• : ' ' • " Each p r i v a t e bank s h a l l i s s u e c e r t i f i c a t e s of stock to the individual or i n d i v i d u a l s forming the bank " i n an amount equal to the c a p i t a l of said bank, which c e r t i f i c a t e s of s t o c k s h a l l be deemed and considered t h e c a p i t a l stock of such bank, •*, * * " . (Acts of 1907, p . 174, sec. 4; Banking Laws, 1929, sec. 4 , p . 4 5 . ) C e r t i f i c a t e from bank commissioner to t r a n s a c t banking b u s i n e s s ; when : issued; f e e r e q u i r e d . " ' ~ - : ' ' ' A f t e r the f i l i n g of the statement r e f e r r e d to above and the "payment to the bank commissioner ( o f ) a f e e of o n e - t e n t h of 1 p e r cent, - 26 • , . X-6812 . • • ; of sudh c a p i t a l atotiki and the f i i l f i g H t h the "bank commissioner, ( o f ) the oath of some member of the p a r t n e r s h i p , f i r m or i n d i v i d u a l , t h a t the c a p i t a l has been p a i d i n as provided f o r and | n compliance * * * (vrith) t h i s a c t , then the bank commissioner s h a l l , without u n n e c e s s a r y d e l a y , i s s u e to such p a r t n e r s h i p , f i r m or i n d i v i d u a l , a c e r t i f i c a t e a u t h o r i z i n g such p a r t n e r s h i p , f i r m or i n d i v i d u a l t o t r a n s a c t a banking b u s i n e s s . " (Acts of 1907, p . 174; s e c . 5; Banking Laws, 1929, s e c . 5, p . 4 5 . ) L i s t of owners must be posted and changes mast be r e p o r t e d to bank commissioner. A l i s t of the owners of any p r i v a t e bank, and a statement to the e f f e c t t h a t the i n s t i t u t i o n i s a p r i v a t e bank, must be p o s t e d i n the room of every such bank. Any subsequent changes i n the owners must be shown on the l i s t and a r e p o r t of a l l such changes must be made t o the bank commissioner. (Acts of 1907, p . 174, s e c . 6; Banking Laws, 1929, s e c . 6, p . 4 5 . ) Report showing resources and l i a b i l i t i e s mist be made to bank COB** m i s s i o n e r ; number r e q u i r e d and contents o f . Every p r i v a t e banker " s h a l l make to the bank commissioner two r e p o r t s during each and every y e a r , according t o the form which may be p r e s c r i b e d by him, v e r i f i e d by the oath or a f f i r m a t i o n of the p r e s i d e n t , c a s h i e r or other managing agent of such bank, which r e p o r t s h a l l exh i b i t i n d e t a i l the resources and l i a b i l i t i e s of the bank a t the c l o s e of b u s i n e s s on any p a s t day to be by him s p e c i f i e d ; * * * "• These r e p o r t s must be ma.de w i t h i n f i v e days a f t e r they have been c a l l e d f o r by t h e bank commissioner and a v e r i f i e d copy mist be p u b l i s h e d i n a .newsp a p e r . (Acts of 1907, p . 174, s e c . 7; Banking Laws, 1929, s e c . 7, p . 46.) Commissioner may c a l l f o r s p e c i a l r e p o r t s . The commissioner i s empowered to c a l l f o r s p e c i a l r e p o r t s "whenever , i n h i s Judgment, the same s h a l l be n e c e s s a r y , i n order t o a r r i v e a t a f u l l and complete knowledge of i t s ( t h e p r i v a t e bank' s) c o n d i t i o n " . (Acts of 1907, p . 174, s e c . 7; Banking Laws, 1929, s e c . 7, p . 4 6 . ) Capital s t o c k , s u r p l u s and undivided p r o f i t s mast be given as i t e m s . Each p r i v a t e bank " i n making any statement of the l i a b i l i t i e s and a s s e t s of s a i d bank, s h a l l give the amount of i t s c a p i t a l s t o c k , i t s s u r p l u s and undivided p r o f i t s as items t h e r e o f . " (Acts of 1907, p . 174, s e c . 4; Banking Laws, 1927, s e c . 4, p , 4 5 ) . "In no r e p o r t s f i l e d * * * s h a l l r e a l or p e r s o n a l p r o p e r t y of an i n d i v i d u a l or i n d i v i d u a l s owning s a i d bank, except the t i t l e i s i n the bank, be p e r m i t t e d as an a s s e t . " (Acts of 1907, p . 174, s e c . 7; Banking Laws, 1929, s e c . 7, p . 4 6 . ) - 27 - X-6812 P e n a l t y for...fai lvtoe..tqJy&laMA,..MlUlSUteiish r e p o r t s of c o n d i t i o n . Any p r i v a t e "bank f a i l i n g to make and p u b l i s h any r e p o r t of cond i t i o n w i t h i n f i v e days a f t e r d r e q u e s t i s made t h e r e f o r i s s u b j e c t to a p e n a l t y of not l e s s than one hundred dollars nor more than f i v e hundred d o l l a r s . (Acts of 1907, p. 174, s e c . 7; Banking Laws, 192$, s e c . 7, p . 4 6 ) . Additional p e n a l t i e s prescribed for violations. "Any p e r s o n , f i r m or c o p a r t n e r s h i p v i o l a t i n g any of the p r o v i s i o n s of t h i s (1907) a c t s h a l l he f i n e d in any sum not exceeding one thousand d o l l a r s , to which may be added f o r the second o f f e n s e imprisonment f o r any term not exceeding two y e a r s . " (Acts of 1907, p . 174, s e c . 9; Banking LaWs, 1929, s e c . 9, p . 4 6 . ) P r o p e r t y held i n t r u s t . I f p r o p e r t y i s held i n t r u s t by a p r i v a t e banker, complete i n formation regarding the t r u s t must be s e t f o r t h i n an instrument which must be recorded i n t h e r e c o r d e r ' s o f f i c e of the county i n '"hich the p r i v a t e bank i s l o c a t e d and the instrument t o g e t h e r with a c e r t i f i c a t e showing t h a t i t has been recorded must be f i l e d with the bank commiss i o n e r . I f the instrument is. not recorded and f i l e d , * the p r o p e r t y held i n t r u s t " s h a l l be considered a p a r t of the a s s e t s " of the p r i v a t e bank i n case the a f f a i r s of the bank a r e wound up and the "remaining a s s e t s a r e not s u f f i c i e n t to pay i n f u l l the bona f i d e claims of a l l d e p o s i t o r s . " (Acts of 1907. p . 174, s e c . 10; Banking Laws, 1929, s e c . 10, p . 47 ) Depositors have l i e n on a s s e t s . The d e p o s i t o r s i n any p r i v a t e bank " s h a l l have a f i r s t l i e n on the a s s e t s of such bank i n case i t i s wound u p , to the amount of t h e i r s e v e r a l d e p o s i t s . And f o r any balance remaining unpaid, such d e p o s i t o r s s h a l l share i n the g e n e r a l a s s e t s of the owner or owners, a l i k e , with, g e n e r a l c r e d i t o r s . " (Acts of 1907, p . 174, s e c . 11; Banking l a w s , 1929, s e c . 11, p. 47 ) P r i v a t e banks may sue and be sued; s e r v i c e of p r o c e s s ; e f f e c t of judgments. Any p r i v a t e banker " s h a l l have the r i g h t to sue, and be sued, u n der the name under which such bank i s authorized to t r a n s a c t i t s b u s i n e s s . Service of summons or other process of court upon the o f f i c e r or agent i n charge of the business of such bank s h a l l be good and s u f f i c i e n t s e r v i c e to give the court j u r i s d i c t i o n , and any judgment obtained against su<£i bank s h a l l be v a l i d and binding against a l l the persons i n t e r e s t e d therein." (Acts of 1907, p . 174, s e c . 12; Banking Laws, 1929, s e c . 12, ?• 47.) X-6812 - 26 u loans to o f f i c e r s r e s t r i c t e d . No p r i v a t e banker nor any of i t s o f f i c e r s " s h a l l loan any of the funds of s a i d bank in any amount exceeding t h i r t y (30) p e r cent of the c a p i t a l stock of s a i d bank to any o f f i c e r or o f f i c e r s t h e r e of" . (Acts of 1907, p. 174, sec. 13; Banking Laws, 1929, sec. 13, p . 48.) Branch o f f i c e s p r o h i b i t e d . I t i s unlawful f o r any p r i v a t e banker "to open, or e s t a b l i s h a branch bank or branch o f f i c e : Provided, That the p r o v i s i o n s of t h i s section s h a l l not apply to branch banks or branch o f f i c e s f o r which c h a r t e r s have h e r e t o f o r e been granted." (Acts of 1921, p. 367, sec. 1; Banking Laws, 1929, p . 139.) Trust -powers may ~oe executed. P r i v a t e banks may "accept and execute t r u s t s of any and every d e s c r i p t i o n which may be committed or t r a n s f e r r e d to them, under the same r u l e s and r e g u l a t i o n s a s now govern l i k e powers in loan and t r u s t companies." (Acts of 1915, p. 310; Banking Laws, 1929, p. 81.) Examinations: number and Character o f . The a f f a i r s of every p r i v a t e bank s h a l l be examined by one of the examiners appointed by the bank commissioner "as o f t e n a s s h a l l b e deemed n e c e s s a r y " , and a thorough examination into a l l the a f f a i r s of the bank i s r e q u i r e d . The examiner may examine under oath any of the b a n k ' s O f f i c e r s and a g e n t s , has the power to administer oaths to such o f f i c e r s and agents, and must make a d e t a i l e d r e p o r t of the c ondition of the bank to the bank commissioner. Each bank i s charged a f e e f o r such examinations according to the amount of i t s a s s e t s . (Acts of 1911, p, 30, sec. 2, as amended by Acts of 1921, p. 816 and by Acts of 1929, p, 495; Banking Laws, 1929, sec. 2, pp. 83-85) Insolvent or f a i l i n g c o n d i t i o n : r e c e i v e r may be appointed; d u t i e s of examiner and bank commissioner. If a p r i v a t e bank i s in an i n s o l v e n t or f a i l i n g c o n d i t i o n , or if the a s s e t s a r e being wasted or improperly used, a t the time the S t a t e bank examiner makes an examination, the examiner i s r e q u i r e d immediately to n o t i f y the bank commissioner. I f the commissioner then deems i t "necessary and expedient" he may d i r e c t the examiner or some other person to take charge and c o n t r o l of the p r i v a t e bank; and the commissioner s h a l l , if he f i n d s i t to be to the b e s t i n t e r e s t s of t h e d e p o s i t o r s and c r e d i t o r s of the bank, make a p p l i c a t i o n to the c i r c u i t or superior c o u r t of the county where the bank i s s i t u a t e d f o r the appointment of a r e c e i v e r f o r i t . Notice of such a p p l i c a t i o n s h a l l be given to the s t o c k h o l d e r s and d e p o s i t o r s of the bank by p u b l i c a t i o n as X-6812 - 29 F 1 6 3 d i r e c t e d by the c o u r t . If ally p ^ i v a t # bank becomes in a f a i l i n g or i n solvent condition or f a i l s or suspends between p e r i o d s of examination, i t s h a l l be the duty of i t s o f f i c e r s immediately to n o t i f y the commissioner of such condition, f a i l u r e or suspension, and the commissioner s h a l l thereupon appoint some proper person to take charge of i t s a s s e t s , pending a p p l i c a t i o n f o r and the appointment of a r e c e i v e r . Any of the o f f i c e r s f a i l i n g to so r e p o r t the suspension or f a i l u r e of h i s bank s h a l l be deemed g u i l t y of a misdemeanor and on conviction may be f i n e d not l e s s than one hundred d o l l a r s nor more than f i v e hundred d o l l a r s . The person appointed to t a k e charge of the a s s e t s of any p r i v a t e bank s h a l l r e c e i v e reasonable compensation to be recommended by the bank commissioner and allowed him by the court having j u r i s d i c t i o n over the r e c e i v e r , and immediately p a i d out of the a s s e t s b e f o r e any d i s t r i b u t i o n thereof i s made. (Acts of 1911, p. 30, sec. 2, as amended by Acts of 1921, p. 816, and by Acts of 1929, p. 495; Banking Laws, 1929, sec. 2, pp. 83-85). F a i l u r e of bank commissioner to discharge d u t i e s with r e f e r e n c e to f a i l i n g or i n s o l v e n t -private banks, I f the bank commissioner f a i l s , n e g l e c t s or r e f u s e s f o r f i f t e e n days to discharge any duty imposed upon him with r e f e r e n c e to f a i l i n g or i n s o l v e n t p r i v a t e banks, the d e p o s i t o r s and c r e d i t o r s r e p r e s e n t i n g 25 p e r cent of the t o t a l d e p o s i t s and o b l i g a t i o n s , except stock l i a b i l i t y , have t h e r i g h t to p e t i t i o n the Attorney General who s h a l l thereupon perform t h e d u t i e s of the bank commissioner in the p a r t i c u l a r case and apply f o r a r e c e i v e r . (Acts of 1911, p . 30, sec. 2, as amended by Acts of 1921, p, 816, and by Acts of 1929, p . 495; Banking Laws, 1929, sec. 2, p. 85.) Voluntary l i q u i d a t i o n ; commissioner may P e t i t i o n f o r r e c e i v e r . When a p r i v a t e bank has been in voluntary l i q u i d a t i o n f o r eighteen or more months, the bank commissioner may p e t i t i o n the court f o r the appointment of a r e c e i v e r if he considers t h a t the a f f a i r s a r e not being administered to the b e s t i n t e r e s t s of the d e p o s i t o r s and stockholders,. Upon the appointment of the r e c e i v e r , he " s h a l l take charge and proceed to administer and terminate the a f f a i r s of the i n s t i t u t i o n . " (Acts of 1915, p . 546, sec. 1; Banking Laws, 1929, p . 82)• F a i l u r e to pay examination f e e a l s o cause f o r appointment of r e c e i v e r . A f a i l u r e to pay any examination f e e i s a l s o cause f o r the appointment of a r e c e i v e r of a p r i v a t e bank. (Acts of 1911, p . 30, sec. 2, a s amended by Acts of 1921, p . 816, and Acts of 1929, t>. 495; Banking Laws, 1929, s e c . 2, p . 85) Owners may s t a y or a b a t e appointment of r e c e i v e r . » Upon the f i l i n g of a bond b e f o r e the court which appointed a I 163 X-6812 r e c e i v e r f o r a p r i v a t e bank, or "before which the commissioner's app l i c a t i o n f o r t h e appointment of a r e c e i v e r i s pending, t h e owners of a p r i v a t e t a n k may abate or s t a y the appointment of a r e c e i v e r . (Acts of 1907, p . 174, sec. 14; Banking Laws, 1929, sec. 14, p . 4 8 . ) Voluntary l i q u i d a t i o n . The laws of t h i s s t a t e contain p r o v i s i o n s o u t l i n i n g t h e p r o cedure and the c o n d i t i o n s under which a p r i v a t e hank may go i n t o v o l , u n t a r y l i q u i d a t i o n . (Acts of 1907, p . 174, sec. 15; Banking Laws, 1929, sec. 15, p . 4 8 . ) Reports and examination of p r i v a t e banks i n voluntary l i q u i d a t i o n . P r i v a t e banks i n voluntary l i q u i d a t i o n a r e s u b j e c t t o t h e same examinations and must, a t the d i s c r e t i o n of the bank commissioner, make the same r e p o r t s as solvent p r i v a t e bankers. (Acts of 1911, p . 30, s e c . 2, as amended by Acts of 1921, p. 816, and Acts of 1929, p . 495; Banking Laws, 1929, s e c . 2, p . 85.) Taxation of p r i v a t e banks. There a r e a l s o p r o v i s i o n s covering the t a x a t i o n of membership shares or c e r t i f i c a t e s of stock of p r i v a t e banks. (Acts of 1919, p . 198; Banking Laws, 1929, pp. 101-108.) - 31 - X-6812 i 16 IMAITo p r o v i s i o n s covering operation except r e s t r i c t i o n s on the use of c e r t a i n a d v e r t i s i n g or banking terms. The laws of t h i s S t a t e provide t h a t " I t s h a l l be u n l a w f u l f o r any i n d i v i d u a l , p a r t n e r s h i p , or unincorporated a s s o c i a t i o n * * * not s u b j e c t to s u p e r v i s i o n or examination of the "banking department" to make use of the words "tank", " t a n k i n g " , "tanker" or any d e r i v a t i v e of the word " t a n k i n g " , or t o make use of any s i g n or a d v e r t i s i n g i n d i c a t ing t h a t the p l a c e of business or the business c a r r i e d on i s t h a t of a bank. (Banking Laws, 1929, ch. 412, s e c . 9151.) I t i s a l s o provided t h a t a v i o l a t i o n of these p r o v i s i o n s c o n s t i t u t e s a misdemeanor (Banki n g Laws, 1929, ch. 412, s e c . 9152); but t h a t n e i t h e r the p e n a l t i e s p r e s c r i b e d f o r the commission of t h i s misdemeanor nor the above r e s t r i c t i o n on the use of c e r t a i n a d v e r t i s i n g or banking terms " s h a l l be cons t r u e d as a f f e c t i n g or i n any wise i n t e r f e r i n g with any p r i v a t e bank or p r i v a t e banker t h a t may be engaged i n lawful business p r e v i o u s to (Banking Laws, 1929, ch. 412, s e c . 9153). An adA p r i l 16, 1919." d i t i o n a l p e n a l t y i s p r e s c r i b e d i n case "any * * * p r i v a t e banker, or p e r s o n , not i n c o r p o r a t e d under the p r o v i s i o n s " of law covering savings banks," or any o f f i c e r , agent, s e r v a n t , or employee t h e r e o f " a d v e r t i s e s or e x h i b i t s any s i g n as a savings bank. (Banking Laws, 1929, ch. 413, s e c . 9200 ) . The laws a l s o r e q u i r e corporations organized under t h e g e n e r a l i n c o r p o r a t i o n laws to t r a n s a c t a banking business to have the word " S t a t e " as a p a r t of t h e i r t i t l e s , but these laws s p e c i f i c a l l y deny the r i g h t to use t h i s word as a p a r t of i t s t i t l e to any " p a r t n e r s h i p , i n d i v i d u a l , or unincorporated a s s o c i a t i o n engaged i n buying or s e l l i n g exchange, r e c e i v i n g d e p o s i t s , discounting notes and b i l l s , or other banking b u s i n e s s , " (Banking Laws, 1929, ch. 414, s e e s . 9202 and 9203.) KANSAS Corporate c h a r t e r r e q u i r e d to engage in banking b u s i n e s s . "From' and a f t e r the passage and taking e f f e c t of t h i s a c t , i t s h a l l be unlawful f o r an i n d i v i d u a l , f i r m or a s s o c i a t i o n to engage in the banking b u s i n e s s in the S t a t e of Kansas without f i r s t making app l i c a t i o n to and r e c e i v i n g a corporate c h a r t e r t h e r e f o r from the S t a t e c h a r t e r board, and p r o c u r i n g a c e r t i f i c a t e to t r a n s a c t such business from t h e bank commissioner, a s provided by law; Provided, That t h i s a c t s h a l l not apply to any i n d i v i d u a l , f i r m or a s s o c i a t i o n now engaged in the t r a n s a c t i o n of banking b u s ine ss in the S t a t e of Kansas a s a p r i v a t e bank." (Laws of 1929, ch. 90, sec. 1; Banking Laws, 1929, sec. 95, p . 29). P r i v a t e bankers engaged in b u s i n e s s a t the time of the enactment of the above "provision of law " s h a l l be amenable to a l l the p r o v i s i o n s " of the s o - c a l l e d bank a c t , (Laws of 1897, ch. 47, sec. 36, as amended by Laws of 1907, ch. 64, sec. 1; Revised S t a t u t e s of Kansas, 1923, sec, 9-138; Banking Laws, 1929, sec. 36, p. 1 4 . ) X-6812 u S '2 - mrucgY P r i v a t e banking b u s i n e s s e x p r e s s l y p r o h i b i t e d . The laws of f u l f o r any person or n e r s , to engage in or t h i s Commonwealth." C a r r o l l ' s Ky. S t a t s . , t h i s S t a t e provide 11 That i t s h a l l be unlawp e r s o n s , e i t h e r as i n d i v i d u a l s or c o - p a r t conduct the business of p r i v a t e banking in (Acts of 1906, Ch. 44, p. 278, sec. 1; 1930, sec. 602a-1 ) . P e n a l t y f o r t r a n s a c t i n g p r i v a t e banking b u s i n e s s . "Any person or persons who s h a l l engage in such b u s i n e s s a f t e r t h i s law s h a l l become e f f e c t i v e s h a l l be deemed g u i l t y of a misdemeanor, and, upon c o n v i c t i o n , s h a l l be f i n e d not l e s s than twenty nor more than f i f t y d o l l a r s f o r each day he or they s h a l l be engaged in s a i d b u s i n e s s ; a f t e r April 15, 1906, to be recovered under indictment in the c i r c u i t court of the country where the o f f e n s e s h a l l be committed.." (Acts of 1906, ch. 44, p . 278, sec. 2; C a r r o l l ' s Ky. S t a t s . , 1930, sec. 602a-2 ) . P r i v a t e banking p r o v i s i o n s repealed; i n c o r p o r a t i o n r e q u i r e d . " S e c t i o n s 599, 600, 601 and 602, Kentucky S t a t u t e s , r e l a t i n g to p r i v a t e banking a r e hereby r e p e a l e d , and persons h e r e a f t e r conducting or engaging in the banking busine ss in t h i s Commonwealth a r e r e q u i r e d t o become incorporated as now provided by law." (Acts of 1906, ch. 44, p. 278, sec. 3; C a r r o l l ' s Ky. S t a t s . , 1930, sec. 602a-3 ) . 165 X-6312 . 33 166 . LOUISIANA. P r i v a t e "banking of d o u b t f u l l e g a l i t y . Section 275 of the Revised S t a t u t e s of Louisiana (Act 166 of 1855) p r o v i d e s t h a t "Any person or a s s o c i a t i o n of p e r s o n s , or c o r p o r a t i o n formed i n compliance with the f o l l o w i n g p r o v i s i o n s , may t r a n s a c t t h e business of banking i n t h i s s t a t e , and e s t a b l i s h o f f i c e s of d i s c o u n t , d e p o s i t s , and c i r c u l a t i o n f o r t h a t purpose, upon the terms and c o n d i t i o n s , and s u b j e c t to a l l the l i a b i l i t i e s and p e n a l t i e s h e r e i n described. " Section 1 of Act 179 of 1902, as amended by Act 140 of 1906, (Banking Law Pamphlet, 1928, sec. 1, p . 4) provides "*** t h a t t h e b u s i n e s s of banking s h a l l be c a r r i e d on only by such incorporated a s s o c i a t i o n s as s h a l l have been organized under t h e laws of t h i s s t a t e , and of t h e United S t a t e s , by i n d i v i d u a l c i t i z e n s of the s t a t e and by f i r m s domiciled i n the s t a t e where a c t i v e members s h a l l be c i t i zens of t h i s s t a t e , provided t h a t no p r i v a t e banker or other p e r s o n or persons not incorporated under t h i s a c t s h a l l be p e r m i t t e d t o use t h e t i t l e Bank, Banking Assoc ia t i o n or Savings Bank i n connection w i t h i t s name." Section 1 of Act 137 of 1918 (Banking Law Pamphlet, 1928, -sec. 1, p . 105), p r o v i d e s i n p a r t t h a t "•••Ho p e r s o n , f i r m , a s s o c i a t i o n , company or c o r p o r a t i o n , e i t h e r domestic or f o r e i g n , excepting only banks organized under the laws of the United S t a t e s , not s u b j e c t t o t h e s u p e r v i s i o n of t h e Examiner of S t a t e banks, and not r e q u i r e d by the laws of the S t a t e of Louisiana t o r e p o r t t o him, and which has not received from the Examiner of S t a t e banks a c e r t i f i c a t e of a u t h o r i t y t o do a banking b u s i n e s s , *** s h a l l engage i n the business of banking, or the b u s i ness of r e c e i v i n g money on d e p o s i t , *** or s o l i c i t or r e ceive d e p o s i t s or t r a n s a c t business i n t h e way or manner of a bank, savings bank or t r u s t company ***" Section 4 of t h i s Act (Banking Law Pamphlet, 1928, s e c . 4, p . 108), a l s o p r o v i d e s t h a t " a l l laws or p a r t s of laws i n c o n f l i c t herewith be, and t h e same axe hereby r e p e a l e d . " I X-6812 *. .34 — The p r o v i s i o n s Of Section 275 of the. Revised S t a t u t e s and Sect i o n 1 of Act 179 of 1902, a s amended "by Act 140 of 1906, above quoted authorized p r i v a t e "bankers to carry on the "business of "banking"; but whether p r i v a t e "banking can now "be t r a n s a c t e d l a w f u l l y i s a doubtf u l question i n view of t h e f a c t t h a t the laws do not appear t o contain any p r o v i s i o n s p r o v i d i n g f o r the supervision o f , or t h e Issuance of a c e r t i f i c a t e of a u t h o r i t y to do a "banking "business t o , p r i v a t e "bankers by t h e "Examiner of S t a t e banks", which i s r e q u i r e d by t h e above quoted p r o v i s i o n of Section 1 of Act 137 of 1918, as a condition precedent to the t r a n s a c t i o n of a banking b u s i n ess by any person or c o r p o r a t i o n . Furthermore, t h e Examiner of S t a t e banks advises t h a t he w i l l not i s s u e a c e r t i f i c a t e of a u t h o r i t y to a p r i v a t e banker t o engage i n t h e banking business. A d d i t i o n a l p r o v i s i o n s of Act 137 of 1918 a f f e c t i n g t h e p r i v a t e banking s i t u a t i o n a r e s e t f o r t h below. X-6812 w 35 . P r o h i b i t i o n a g a i n s t a d v e r t i s i n g or t r a n s a c t i n g "business as "bank, savings ."bank or t r u s t company. No p e r s o n , f i r m , a s s o c i a t i o n , company or c o r p o r a t i o n , except "banks organized under t h e laws of the United S t a t e s , not a u t h o r i z e d to do b u s in e s s by t h e S t a t e Bank Examiner or r e p o r t i n g t o or under h i s s u p e r v i s i o n , can " a d v e r t i s e t h a t he or i t i s accepting money, savings and i s s u i n g n o t e s or c e r t i f i c a t e s of deposit or investment t h e r e f o r * * * or t r a n s a c t b u s i n e s s i n such a way or manner as t o lead t h e p u b l i c t o b e l i e v e t h a t i t s b u s i n e s s i s t h a t of a bank, savings bank, or t r u s t company, * * * , or u s e the word, 'Bank 1 , ' B a n k e r : , 'Banking', 'Savings Bank', ' S a v i n g s ' , ' T r u s t ' , ' T r u s t e e ' , 'Trust Company', * * * or any other word or words of s i m i l a r import as p a r t of i t s name or t i t l e , " or make use of any s i g n or o t h e r a d v e r t i s i n g i n d i c a t i n g t h a t the p l a c e of business or the b u s i n e s s c a r r i e d on i s i n any way t h a t of a bank, savings bank, or t r u s t company. (Act 137 of 1918, sec. 1; Banking Law Pamphlet, 1928, s e c . 1. pp. 105 and 106.) Penalty f o r v i o l a t i o n of above p r o v i s i o n s ; procedure t o r e s t r a i n v i o l a t i o n The laws p r e s c r i b e t h a t a p e n a l t y of $100 a day. mast be paid t o the S t a t e f o r each day t h a t a v i o l a t i o n of any of the above p r o v i s i o n s continues. Upon an a c t i o n brought by the Attorney General t h e D i s t r i c t Court may i s s u e an i n j u n c t i o n r e s t r a i n i n g the use of words or from f u r t h e r t r a n s a c t i n g b u s i n e s s i n v i o l a t i o n of the above p r o v i s i o n s , and may make such other order as equity and j u s t i c e way r e q u i r e . (Act 137 of 1918, sec. 1; Banking Law Pamphlet, 1928, s e c . 1, pp. 106 and 107.) Examiner must examine persons or f i r m s suspected of v i o l a t i n g above provisions; f e e s . Whenever i t comes t o the n o t i c e of the S t a t e Bank Exan&ner t h a t any p e r s o n , f i r m , or c o r p o r a t i o n , i s v i o l a t i n g t h e above p r o v i s i o n s or i s conducting the b u s i n e s s of banking, i t i s h i s duty to make an intmediate examination of the a f f a i r s of any such p e r s o n , f i r m , or corpora t i o n . For the purpose of making such examination, t h e examiner i s given f r e e access t o a l l the books, papers and accounts and has power t o admini s t e r oaths to any o f f i c e r , a g e n t , employee, e t c . , of such p e r s o n , f i r m , or c o r p o r a t i o n , and t o any o t h e r person whose' testimony may be r e q u i r e d . The examiner i s a u t h o r i z e d i n h i s d i s c r e t i o n , t o a s s e s s t h e same f e e f o r such examination as i s assessed f o r the examination of i n c o r p o r a t e d banks and t r u s t companies. (Act 137 of 1918, s e c . 2; Banking Law Pamphlet, 1928, s e c . 2. pp. 107 and 108.) Refusal t o permit examination or answer i n q u i r i e s . A r e f u s a l t o e x h i b i t or t u r n over any books, accounts and papers f o r examination or to answer any i n q u i r i e s of the examiner ,x c o n s t i t u t e s a misdemeanor which, upon c o n v i c t i o n , i s punishable by a f i n e of not l e s s than $100 nor more than $500. (Act 137 of 1918, sec. 2; Banking Law Pamphlet, 1928, s e c . 2, p . 107.) X-6812 t ! 169 Examiner to r e p o r t v i o l a t i o n s t o Attorney General. Where the S t a t e Baric Examiner has duly a s c e r t a i n e d t h a t any person, f i r m , or c o r p o r a t i o n i s engaging i n the b u s i n e s s of "banking or otherwise v i o l a t i n g the p r o v i s i o n s above r e f e r r e d t o , i t i s h i s duty to r e p o r t such v i o l a t i o n or v i o l a t i o n s to t h e Attorney General, "who s h a l l i n s t i t u t e the necessary proceedings to enforce the p e n a l t i e s " above provided f o r . (Act 137 of 1918, s e c . 3; Banking Law Pamp h l e t , 1928, s e c . 3, p . 108.) MAIUE P r i v a t e banking p r o h i b i t e d ; some exceptions. General r u l e : " No p e r s o n , c o p a r t n e r s h i p , a s s o c i a t i o n , or c o r p o r a t i o n s h a l l do a banking b u s i n e s s u n l e s s duly a u t h o r i z e d under the laws of t h i s s t a t e or t h e United S t a t e s , except as provided by s e c t i o n f o u r . The s o l i c i t i n g , r e c e i v i n g , or a c c e p t i n g of money or i t s equivalent on deposit as a r e g u l a r b u s i n e s s by any p e r s o n , c o p a r t n e r s h i p , a s s o c i a t i o n , or c o r p o r a t i o n , or a c o r p o r a t i o n intended to d e r i v e p r o f i t from t h e loan of money except as a reasonable incident to t h e t r a n s a c t i o n of o t h e r c o r p o r a t e b u s i n e s s or when necessary to prevent c o r p o r a t e funds from being unproductive, s h a l l be deemed t o be doing a banking b u s i n e s s , whether such deposit i s made s u b j e c t to check or i s evidenced by a c e r t i f i c a t e of d e p o s i t , a pass-book, a n o t e , a r e c e i p t , or other w r i t i n g ; provided t h a t nothing h e r e i n s h a l l apply to or include money l e f t with an a g e n t , pending investment i n r e a l e s t a t e or s e c u r i t i e s f o r or on a c count of h i s p r i n c i p a l . Whoever v i o l a t e s t h i s s e c t i o n , e i t h e r i n d i v i d u a l l y or as an i n t e r e s t e d p a r t y i n any c o p a r t n e r s h i p , a s s o c i a t i o n , . o r c o r p o r a t i o n , s h a l l be punished by a f i n e of not l e s s than t h r e e hundred d o l l a r s nor more than one thousand d o l l a r s , or by imprisonment f o r not l e s s than s i x t y days nor more than eleven months, or by both such f i n e and imprisonment." (U.S. of 1930, ch. 57, s e c . 3 . ) Exceptions: (a) Corporations which d e s i r e to encourage t h r i f t among t h e i r employees may secure r i g h t to r e c e i v e from such employees d e p o s i t s s u b j e c t to i n t e r e s t a t a s p e c i f i e d r a t e , upon a p p l i c a t i o n to t h e bank commissioner and compliance with c e r t a i n c o n d i t i o n s . (B.S. of 19j30, ch. 57, s e c . 4 . ) (b) Apparently a f o r e i g n person or a s s o c i a t i o n may c a r r y on t h e b u s i n e s s of accumulating and loaning or i n v e s t i n g t h e savings of i t s members or of o t h e r persons i n t h e manner of loan or b u i l d i n g a s s o c i a t i o n s upon compliance w i t h c e r t a i n c o n d i t i o n s . - 37 "The bank commissioner may a u t h o r i z e any such a s s o c i a t i o n or c o r p o r a t i o n duly established, under the laws of another s t a t e t o c a r r y on such b u s i n e s s i n t h i s s t a t e , but s a i d a s s o c i a t i o n or c o r p o r a t i o n s h a l l not t r a n s a c t such business i n t h i s s t a t e u n l e s s i t s h a l l f i r s t deposit with the t r e a s u r e r of s t a t e , the sum of t w e n t y - f i v e thousand d o l l a r s and t h e r e a f t e r a sum equal t o f i f t e e n p e r cent of the d e p o s i t s made i n such a s s o c i a t i o n or c o r p o r a t i o n by c i t i z e n s of the s t a t e , the amount of percentage of d e p o s i t s so r e q u i r e d t o be determined from time to time by the bank commissioner; or i n l i e u thereof the whole or any p a r t of s a i d sum may c o n s i s t of any of the s e c u r i t i e s i n which savings banks may i n v e s t , as r e g u l a t e d i n s e c t i o n twenty-seven a t t h e i r par v a l u e , and the s a i d deposit s h a l l be held i n t r u s t by s a i d t r e a s u r e r f o r t h e p r o t e c t i o n and indemnity of t h e r e s i dents of t h e s t a t e w i t h whom such a s s o c i a t i o n s or c o r p o r a t i o n s r e s p e c t i v e l y have done or may t r a n s a c t b u s i n e s s . Said moneys or p r o p e r t y s h a l l be paid out or disposed of only on t h e order of some court of competent j u r i s d i c t i o n , made on due n o t i c e t o the a t t o r n e y - g e n e r a l of the, s t a t e , and upon such n o t i c e t o the c r e d i t o r s and shareholders of such a s s o c i a t i o n or c o r p o r a t i o n as the court s h a l l p r e s c r i b e . For the purpose of a s c e r t a i n i n g the business and f i n a n c i a l condition of any such a s s o c i a t i o n or c o r p o r a t i o n doing or d e s i r i n g to do such b u s i n e s s , the bank commissioner may make examinations of such a s s o c i a t i o n s or c o r p o r a t i o n s , a t such times and a t such p l a c e s as he may d e s i r e , the expense of such examinations being paid by the a s s o c i a t i o n or corporat i o n examined, and may a l s o r e q u i r e r e t u r n s t o be made i n such form and a t such times as he may e l e c t . Whenever, upon examinat i o n or otherwise, i t i s the opinion of the bank commissioner t h a t any such a s s o c i a t i o n or c o r p o r a t i o n i s t r a n s a c t i n g b u s i n e s s i n such manner as t o be hazardous t o t h e p u b l i c , or i t s cond i t i o n i s such as t o render f u r t h e r proceedings by i t hazardous t o the p u b l i c , s a i d bank commissioner s h a l l revoke or suspend t h e a u t h o r i t y given t o said a s s o c i a t i o n or c o r p o r a t i o n ; but t h i s s e c t i o n s h a l l not prevent such a s s o c i a t i o n , c o r p o r a t i o n , or i n s t i t u t i o n i n c o r p o r a t e d under the laws of another s t a t e , from loaning money upon mortgages of r e a l e s t a t e l o c a t e d w i t h i n t h e s t a t e . " (E.S. of 1930, ch. 57, s e c . 122.) P r o h i b i t i o n of use of words "bank," " s a v i n g s . " " t r u s t " and r e l a t e d words. "No person or p a r t n e r s h i p and no a s s o c i a t i o n or c o r p o r a t i o n u n l e s s duly a u t h o r i z e d under t h e laws of t h i s s t a t e or of the United S t a t e s t o conduct the business of a bank or t r u s t company s h a l l use as a p a r t of the naae or t i t l e under which such b u s in e s s i s conducted, or as d e s i g n a t i n g such b u s i n e s s , the word or words 1 barik, 1 ' b a n k e r , ' ' t r u s t , ' ' t r u s t company,' ' b a n k i n g , ' or ' t r u s t and banking company,' or the p l u r a l of any such word or words or any a b b r e v i a t i o n thereof i n or i n con- X-6812 id 3 8 *m n e c t i o n with any other b u s iness than t h a t of a hank or t r u s t company duly authorized as a f o r e s a i d . Provided, however, t h a t t h i s r e s t r i c t i o n s h a l l not apply t o any such p e r s o n , p a r t n e r s h i p , a s s o c i a t i o n , or c o r p o r a t i o n , conducting b u s i n e s s under such name or s t y l e p r i o r t o the t w e n t y - t h i r d day of A p r i l , n i n e t e e n hundred f i v e . No person, p a r t n e r s h i p , a s s o c i a t i o n , or c o r p o r a t i o n , hank or t r u s t company, except a mutual savings hank organized under the laws of t h i s s t a t e , s h a l l use as a p a r t of i t s name or t i t l e t h e word or words ' s a v i n g , ' ' s a v i n g s , ' or ' s a v i n g s h a n k . ' Provided, however, t h a t t h i s r e s t r i c t i o n s h a l l not apply to any b u s i n e s s being conducted under such name or s t y l e p r i o r t o t h e t w e n t y - t h i r d day of A p r i l , n i n e t e e n hundred f i v e , nor t o any . bank or t r u s t company u s i n g such word or words p r i o r t o t h e f i r s t day of January, n i n e t e e n hundred twenty-nine. Any p e r s o n , p a r t n e r s h i p , a s s o c i a t i o n , or c o r p o r a t i o n v i o l a t i n g any of the p r o v i s i o n s of t h i s s e c t i o n may be enjoined t h e r e f r o m by any court having general equity j u r i s d i c t i o n , on a p p l i c a t i o n of the bank commissioner or any p e r s o n , c o r p o r a t i o n , or a s s o c i a t i o n i n j u r e d or a f f e c t e d by such u s e ; and any such court may f u r t h e r e n j o i n any attempt on the p a r t of any p e r s o n , f i r m , or c o r p o r a t i o n t o mislead or give a f a l s e impression to the p u b l i c t h a t such person, f i r m or c o r p o r a t i o n i s authorized under the laws of t h i s s t a t e t o conduct the b u s i n e s s of a t r u s t company. Any person or persons v i o l a t i n g any of t h e p r o v i s i o n s of t h i s s e c t i o n , e i t h e r i n d i v i d u a l l y , as members of any a s s o c i a t i o n or c o p a r t n e r s h i p , or as i n t e r e s t e d i n any such c o r p o r a t i o n , s h a l l be punished by a f i n e of not more than one thousand d o l l a r s , or by imprisonment f o r not l e s s than s i x t y days nor more than eleven months, or by both such f i n e and imprisonment. 11 (B.S. of 1930, ch. 57, sec. 5 . ) MARYLAND. Ho p r o v i s i o n s covering o p e r a t i o n except r e s t r i c t i o n s a g a i n s t u s i n g certain advertising. Except f o r the following p r o v i s i o n s , which appear to be app l i c a b l e to p r i v a t e banks, the laws of t h i s S t a t e contain no p r o v i s i o n s covering t h e o r g a n i z a t i o n or o p e r a t i o n of p r i v a t e banks: "No p e r s o n , c o - p a r t n e r s h i p or c o r p o r a t i o n not s u b j e c t to the s u p e r v i s i o n and examinations of the Bank Commissioner, and not r e q u i r e d t o make r e p o r t s to him * * *, s h a l l make use of any s i g n a t t h e p l a c e where such b u s i n e s s i s t r a n s a c t e d , having thereon any a r t i f i c i a l or corporate name or o t h e r words i o d i c a t i x ^ t h a t such p l a c e or o f f i c e i s the p l a c e or o f f i c e of a banking i n s t i t u t i o n as d e f i n e d i n t h i s A r t i c l e " ; nor s h a l l such person or p e r s o n s , make use of or c i r c u l a t e any a d v e r t i s i n g " i n d i c a t i n g t h a t such business i s the b u s i n e s s of a bankirg i n s t i t u t i o n ? A v i o l a t i o n of the se p r o v i s i o n s c o n s t i t u t e s a misdemeanor and s u b j e c t s the person or persons committing such v i o l a - X-6812! 1 - 39 t i o n to c e r t a i n p r e s c r i b e d p e n a l t i e s . "The p r o v i s i o n s of t h i s s e c t i o n s h a l l not apply to p e r s o n s , c o p a r t n e r s h i p s , or c o r p o r a t i o n s which, at t h e time t h i s Act t a k e s e f f e c t , (June 1, 1918), a r e engaged i n "business i n i n c o r p o r a t e d towns or c i t i e s of the S t a t e of l e s s than t en thousand i n h a b i t a n t s . " (Annotated Code of Maryland, 1934, Vol. 1, A r t i c l e Eleven sec, 78; Laws of 1910, ch« 219, s e c . 74, as amended by Laws of 1912, ch. 194, sec. 74 and Laws of 1918, ch. 33, s e c . 75; Banking Laws, 1927, s e c . 78, p . 3 6 . ) D e f i n i t i o n of "Banking I n s t i t u t i o n . " "the words 'Banking I n s t i t u t i o n s ' , as used i n t h i s A r t i c l e , s h a l l be held to mean i n c o r p o r a t e d Banks, Savings I n s t i t u t i o n s and Trust Companies, * * * *. (Annotated Code of Maryland, 1924, Vol. 1, A r t i c l e ' E l e v e n Sec. 52; Laws of 1910, ch. 219, sec. 51; Banking Laws, 1927, s e c . 52, p . 27.) MASSACHUSETTS. No p r o v i s i o n s p r o h i b i t i n g p r i v a t e banking b u s i n e s s ; but c e r t a i n a d v e r t i s i n g , and r e c e i v i n g d e p o s i t s as savings bank or t r u s t company prohibited. The laws of t h i s S t a t e do not c o n t a i n any p r o v i s i o n s w i t h r e f e r ence to the o r g a n i z a t i o n or establishment of p r i v a t e banks or bankers, except as i n d i c a t e d i n l a s t paragraph h e r e o f , and except f o r t h e p r o h i b i t i o n s embraced i n t h e f o l l o w i n g p r o v i s i o n s , the laws a r e s i l e n t with regard to t h e o p e r a t i o n of such banks or b a n k e r s . The f o l l o w i n g p r o v i s i o n s p r o h i b i t t h e r e c e i p t of d e p o s i t s as a savings bank or t r u s t company, and t h e use of any a d v e r t i s i n g or banking terms i n d i c a t i n g t h a t the p l a c e of b u s i n e s s or the b u s i n e s s c a r r i e d on i s t h a t of a savings bank or t r u s t company, by any p e r s o n , p a r t n e r s h i p or a s s o c i a t i o n other than savings banks and t r u s t companies i n c o r p o r a t e d under the laws of Massachusetts. P r o h i b i t i o n a g a i n s t r e c e i p t of c e r t a i n d e p o s i t s and use of s p e c i f i c banking terms and o t h e r a d v e r t i s i n g . " * * * no p e r s o n , p a r t n e r s h i p or a s s o c i a t i o n except savings banks and t r u s t companies incorporated under the laws of t h i s commonwealth", and c e r t a i n f o r e i g n banking c o r p o r a t i o n s , s h a l l h e r e a f t e r make use of any s i g n s or other a d v e r t i s i n g i n d i c a t i n g t h a t t h e p l a c e of business or b u s i n e s s t r a n s a c t e d i s t h a t of a savings bank; "nor s h a l l any such * * * p e r s o n , p a r t n e r s h i p or a s s o c i a t i o n , * * * s o l i c i t or r e c e i v e d e p o s i t s or t r a n s a c t b u s ine ss i n the way or manner of a savings bank, or i n such a way or manner a s to lead t h e p u b l i c to bel i e v e , or as i n the opinion of the commissioner might lead t h e public to b e l i e v e , t h a t i t s b u s i n e s s i s t h a t of a savings bank; nor s h a l l any person, p a r t n e r s h i p , * * * or a s s o c i a t i o n , (excepting c e r t a i n i n s t i t u t i o n s not connected w i t h or r e l a t e d t o p r i v a t e banks or bankers) * * * i 173 X-6812 u 40 u h e r e a f t e r t r a n s a c t "business "under any name or t i t l e which c o n t a i n s the word 'hank' or 1 "banking 1 , or any word i n a f o r e i g n language having the same or s i m i l a r meaning, as d e s c r i p t i v e of said b u s i n e s s , o r , i f he or i t does a banking "business or makes a business of r e c e i v i n g money on d e p o s i t , under any name or t i t l e containing the word ' t r u s t ' , or any word i n a f o r e i g n language having the same or s i m i l a r meaning, as d e s c r i p t i v e of said . b u s i n e s s . " (General Laws, ch. 16V> s e c . 12; as amended Act 1921, ch. 78, s e c . 1; Act 1922, ch. 114; "Banking Law Pamphlet R e l a t i n g to Savings Banks, 1929, ch. 167, sec. 12, p . 4 . ) Barflc Commissioner may examine books, accounts, e t c . t o a s c e r t a i n whether law i s being v i o l a t e d . "The commissioner or h i s examiners may examine the accounts, books and papers of any * * * person, p a r t n e r s h i p or a s s o c i a t i o n making a business of r e c e i v i n g money on d e p o s i t , or which has the word ' b a n k ' , •banking', ' b a n k e r ' , ' b a n k e r s ' , or ' t r u s t ' , or any word i n a f o r e i g n language having t h e same or s i m i l a r meaning, i n the name under vdiich i t s business i s conducted, i n order to a s c e r t a i n whether such * * *, person, p a r t n e r s h i p or a s s o c i a t i o n has v i o l a t e d or i s v i o l a t i n g any p r o v i s i o n of t h e preceding s e c t i o n ; and any * * *, p e r s o n , p a r t n e r ship or a s s o c i a t i o n r e f u s i n g t o allow such examination or v i o l a t i n g any p r o v i s i o n of said s e c t i o n s h a l l f o r f e i t t o t h e commonwealth one hundred d o l l a r s a day f o r every day or p a r t thereof during which such r e f u s a l or v i o l a t i o n c o n t i n u e s . " (General Laws, ch. 167, s e c . 13; as amended Acts 1921, ch. 78, s e c . 2; Banking Law Pamphlet R e l a t i n g t o Savings Banks, 1929, ch. 167, sec. 13, p . 4 . ) Commissioner s h a l l r e p o r t v i o l a t i o n s to Attorney General: procedure to restrain violation. Any r e f u s a l t o permit such an examination, or any v i o l a t i o n of the p r o v i s i o n s f i r s t above quoted " s h a l l f o r t h w i t h be r e p o r t e d by the commissioner t o the Attorney General. The said f o r f e i t u r e may be r e covered by an i n f o r m a t i o n or other a p p r o p r i a t e proceeding brought i n the Supreme J u d i c i a l or Superior Court i n the name of the Attorney General. Upon such i n f o r m a t i o n or other proceeding t h e court may i s s u e an i n j u n c t i o n r e s t r a i n i n g such * * * , person, p a r t n e r s h i p or a&socia^t i o n from f u r t h e r p r o s e c u t i o n of i t s business w i t h i n t h e commonwealth during t h e pendency of such proceeding or f o r a l l time, and may make such other orders or decrees as equity and j u s t i c e may r e q u i r e . * (General Laws, ch. 167, sec. 13; as amended Acts 1921, ch. 78, s e c . 2; Banking Law Pamphlet R e l a t i n g t o Savings Banks, ch. 167, sec. 13, p . 4 . ) Further p r o h i b i t i o n a g a i n s t use of term "Trust Company" or r e c e i v i n g d e p o s i t s as t r u s t company. "No person or a s s o c i a t i o n and no bank or c o r p o r a t i o n , except t r u s t companies, s h a l l use i n the name or t i t l e under which h i s or i t s business i s t r a n s a c t e d the words 'Trust Company1 even though said words - 41 - X-6812 ; ' 174 may "be separated i n such name or t i t l e by one or more other words, or a d v e r t i s e or put f o r t h a s i g n as a t r u s t company or i n any way s o l i c i t or r e c e i v e d e p o s i t s as such. Whoever v i o l a t e s t h i s s e c t i o n s h a l l f o r f e i t one hundred d o l l a r s f o r each day during which such v i o l a t i o n cont i n u e s . " C e r t a i n f o r e i g n corporations a r e excepted from the p r o v i s i o n s of t h i s s e c t i o n . (General Laws, ch. 172, s e c . 4; as amended Acts 1923, ch. 41; Trust Company Law Pamphlet, ch. 172, s e c . 4 , p . 15.) Persons engaged i n t h e r e c e i p t and t r a n s m i s s i o n of funds t o f o r e i g n countries* Persons engaged i n t h e business p r i n c i p a l l y or i n c o n j u n c t i o n . with t h a t of s e l l i n g r a i l r o a d or steamship t i c k e t s or i n t h e supplying of l a b o r e r s , r e c e i v i n g d e p o s i t s f o r s a f e keeping or t r a n s m i t t i n g the same or e q u i v a l e n t s t o f o r e i g n c o u n t r i e s s h a l l , "before engaging or becoming f i n a n c i a l l y i n t e r e s t e d or continuing t o engage or be f i n a n c i a l l y i n t e r e s t e d i n the b u s i n e s s of r e c e i v i n g d e p o s i t s of money f o r the purpose of t r a n s m i t t i n g the same or e q u i v a l e n t s thereof t o f o r e i g n c o u n t r i e s , make, execute and d e l i v e r to t h e s t a t e t r e a s u r e r a bond i n a sum equal t o twice the amount of money or e q u i v a l e n t s t h e r e o f t r a n s m i t t e d to f o r e i g n c o u n t r i e s by such person i n any one week, as determined by the commissioner of banks, i n t h i s chapter c a l l e d the commissioner, but i n no event s h a l l t h e sum of the bond be l e s s than f i f t e e n thousand d o l l a r s ; p r o v i d e d , t h a t t h e sum of such bond s h a l l be increased on order of the comrmissioner a t any time to such amount as s h a l l be shown by examination t o be necessary. Said bond s h a l l be conditioned upon the f a i t h f u l holding and t r a n s m i s s i o n of any money or e q u i v a l e n t s thereof which s h a l l have been d e l i v e r e d t o such person f o r transmission t o a f o r e i g n country, and, i n the event of t h e insolvency or bankruptcy of the p r i n c i p a l , upon the payment of the f u l l amount of such bond t o t h e a s s i g n e e , r e ceiver or t r u s t e e of the p r i n c i p a l , as the case may r e q u i r e f o r the b e n e f i t of such persons as s h a l l have been d e l i v e r e d money or equival e n t s thereof to s a i d p r i n c i p a l f o r the purpose of t r a n s m i t t i n g t h e same t o a f o r e i g n c o u n t r y . " (Acts 1923, ch. 473, s e c . 2; Acts 1929, ch. 182, s e c . 2 , ) MICHIGAN. P r i v a t e banks e x p r e s s l y p r o h i b i t e d ; exception. "On and a f t e r the e f f e c t i v e d a t e of t h i s a c t (1925), i t s h a l l be unlawful f o r any i n d i v i d u a l person, or unincorporated a s s o c i a t i o n of i n d i v i d u a l p e r s o n s , t o engage i n the b u s i n e s s of banking, * * *: Provided, That t h i s a c t s h a l l not apply to any i n d i v i d u a l person or unincorporated a s s o c i a t i o n of i n d i v i d u a l persons engaged i n the b u s i ness of banking a t t h e time of t h e passage of t h i s act, 1 1 (Public Acts of 1925, Act No. 284, sec. 1; Banking Laws, 1929, sec. 364, p . 105.) Penalty f o r establishment of p r i v a t e bank. "From and a f t e r the passage of t h i s a c t , no person or a s s o c i a t i o n of p e r s o n s , not incorporated under the banking laws of t h i s S t a t e X-6812 ' -| wrc a 42 k and. not now engaged i n the p r i v a t e banking b u s i n e s s , s h a l l open up or attempt to o p e r a t e any p r i v a t e bank, and any such o p e r a t i o n or attempt s h a l l be deemed a v i o l a t i o n of t h i s act., and the persons so o p e r a t i n g or attempting to operate s h a l l be deemed g u i l t y of a f e l o n y , and on conv i c t i o n thereof s h a l l be punished by a f i n e not exceeding one thousand d o l l a r s or by imprisonment i n the S t a t e p r i s o n f o r not more than f i v e y e a r s , or by both such f i n e and imprisonment i n the d i s c r e t i o n of t h e courts Provided, That nothing i n t h i s act contained s h a l l be construed t o p r o h i b i t the s u r v i v i n g p a r t n e r or p a r t n e r s of a c o p a r t n e r s h i p from continuing the o p e r a t i o n of any p r i v a t e bank operated by such c o p a r t n e r ship a t the time t h i s a c t s h a l l take e f f e c t . " (Public Acts of 1925, Act Ho. 284, s e c . 2; Banking Laws, 1929, s e c . 365, p . 105.) MIMESOTA. "Individual or c o - p a r t n e r s h i p " p r o h i b i t e d from t r a n s a c t i n g b u s i n e s s of savings bank, s a f e d e p o s i t company or t r u s t company. From the following p r o v i s i o n s , i t appears t h a t "a p e r s o n , f i r m , i n d i v i d u a l or c o p a r t n e r s h i p " i s p r o h i b i t e d from a d v e r t i s i n g or engaging i n business i n any way as a savings bank, s a f e d e p o s i t company or t r u s t company. Provisions p r o h i b i t i n g business as savings bank, e t c . "No i n d i v i d u a l , c o - p a r t n e r s h i p or corporation other than a savings bank or s a f e d e p o s i t and t r u s t company s u b j e c t to and complying with a l l t h e p r o v i s i o n s of law r e l a t i n g to such bank or s a f e deposit and t r u s t companies r e s p e c t i v e l y , s h a l l i n any manner d i s p l a y or make use of any s i g n , symbol, token, l e t t e r h e a d , c ard, c i r c u l a r , a d v e r t i s e ment s t a t i n g , r e p r e s e n t i n g or i n d i c a t i n g t h a t he, i t , or t h e y , a r e authorized to t r a n s a c t the b u s i n e ss which a savings bank, s a f e deposit or t r u s t company u s u a l l y does, or under said p r o v i s i o n a r e authorized t o do; nor s h a l l any such i n d i v i d u a l , c o - p a r t n e r s h i p or c o r p o r a t i o n use the words ' s a v i n g s ' or ' t r u s t 1 or ' s a f e d e p o s i t ' alone or i n comb i n a t i o n i n t i t l e or name or otherwise or i n any manner s o l i c i t business or make loans or s o l i c i t or r e c e i v e d e p o s i t s or t r a n s a c t b u s i n e s s as a savings bank or s a f e deposit or t r u s t company. * * . Every i n d i v i d u a l , c o - p a r t n e r s h i p or c o r p o r a t i o n which s h a l l v i o l a t e any of the p r o v i s i o n s of t h i s s e c t i o n s h a l l f o r f e i t to the S t a t e the sum of one hundred d o l l a r s f o r every day such v i o l a t i o n s h a l l c o n t i n u e . " (Act approved March 21, 1929, Laws of 1929, ch. 77, sec. 1; Banking Laws, 1929, s e c . 1, p . 18.) "Bank", "savings bank". " t r u s t conqpany" and "banking" d e f i n e d . "A bank i s a c o r p o r a t i o n under p u b l i c c o n t r o l , having a p l a c e of bus in e s s where c r e d i t 6 a r e opened by the deposit or c o l l e c t i o n of money and currency, s u b j e c t to be p a i d ' o r r e m i t t e d upon d r a f t , check, or order, and where money i s advanced, loaned on s t o c k s , bonds, b u l l i o n , b i l l s of exchange, and promissory n o t e s , and where the same a r e r e c e i v e d f o r discount or s a l e ; and a l l persons and c o - p a r t n e r s h i p s , r e s p e c t i v e l y , so o p e r a t i n g , a r e bankers, • X-6812 « '40 a rt A savings bank i s an i n s t i t u t i o n under l i k e c o n t r o l , managed "byd i s i n t e r e s t e d t r u s t e e s s o l e l y authorized to r e c e i v e and s a f e l y i n v e s t the savings of small d e p o s i t o r s . "A t r u s t company i s 9, c o r p o r a t i o n under l i k e c o n t r o l , a u t h o r i z e d , w i t h i n p r e s c r i b e d l i m i t a t i o n s , to act as a s a f e deposit company, t r u s t e e or r e p r e s e n t a t i v e f o r or under any c o u r t , p u b l i c or p r i v a t e c o r p o r a t i o n , or i n d i v i d u a l , and as s u r e t y or g u a r a n t o r . " (General S t a t u t e s , 1923, sec. 7635; Banking Laws, 1939, p. 7) "A 'bank* i s a c o r p o r a t i o n having a p l a c e of "business i n t h i s S t a t e , where c r e d i t s a r e opened by the deposit of money or currency, or the c o l l e c t i o n of the same, s u b j e c t t o be paid or r e m i t t e d on d r a f t , check or o r d e r ; and where money i s loaned or advanced on s t o c k s , bonds, b u l l i o n , b i l l s of exchange or promissory n o t e s , and where the same a r e received f o r discount or s a l e . A 'savings bank* i s a c o r p o r a t i o n managed by d i s i n t e r e s t e d t r u s t e e s , s o l e l y authorized to r e c e i v e and s a f e l y i n v e s t t h e savings of small d e p o s i t o r s . Every 'bank' or ' s a v ings bank 1 i n t h i s S t a t e s h a l l a t a l l times be under the s u p e r v i s i o n and s u b j e c t t o t h e c o n t r o l of t h e public - examiner, ( s u p e r i n t e n d e n t of banks) * * * and -when so conducted said b u s i n e s s s h a l l be known a s ' b a n k i n g ' . " (General S t a t u t e s , 1923, s e c . 7636; Banking Laws, 1929, P. 8 ) . R e s t r i c t i o n a g a i n s t use of word "bank". "Any p e r s o n , f i r m or corporation c a r r y i n g on i n t h i s S t a t e the b u s i n e s s , or any p a r t thereof , d e f i n e d as 'banking 1 i n the preceding s e c t i o n , who r e f u s e s t o permit t h e p u b l i c examiner ( s u p e r i n t e n d e n t of banks) to i n s p e c t and superintend said b u s i n e s s , and to see t h a t t h e same i s c a r r i e d on i n accordance with the banking laws of t h i s S t a t e s h a l l not be p e r m i t t e d to use t h e word 'bank' as the whole or any p a r t of the b u s i n e s s name of the p l a c e where s a i d business i s c a r r i e d on, nor s h a l l the word 'bank' be used on any s t a t i o n e r y or i n any a d v e r t i s e ment of said b u s i n e s s , as the whole or any p a r t of t h e name or d e s c r i p t i o n of s a i d b u s i n e s s . " (General S t a t u t e s , 1923, s e c , 7637; Banking Laws, 1929, p . 8 . ) MISSISSIPPI. Banking b u s i n e s s may only be t r a n s a c t e d by c o r p o r a t i o n s . The laws of t h i s S t a t e provide t h a t "any person or f i r m now engaged i n the banking b u s i n e s s " as described below, " s h a l l i n c o r p o r a t e w i t h i n s i x months a f t e r t h i s (banking) a c t goes i n t o e f f e c t . This sect i o n s h a l l not apply except when such corporations keep t h e a c t u a l money on deposit or s o l i c i t o u t s i d e d e p o s i t s , but any person or a s s o c i a t i o n of r* 44- — x - s a U 1 7 7 "persons now engaged i n the "banking "business i n t h i s S t a t e s h a l l be s u b j e c t to a l l the p r o v i s i o n s of t h i s (blinking) a c t u n t i l such person, persons or a s s o c i a t i o n s of persons s h a l l be or become incorporated, as provided i n t h i s s e c t i o n " . Any person or f i r m i s doing a banking b u s i n e s s , under the l & s s i s s i p p i laws, when he or i t has "a p l a c e of business w i t h i n t h i s s t a t e , where c r e d i t s a r e opened by the deposit or c o l l e c t i o n of money or currency or negotiable paper s u b j e c t to be p a i d or r e m i t t e d upon d r a f t , r e c e i p t , check or o r d e r , or s a l e of d r a f t s or exchange drawn on l o c a l or f o r e i g n banks, *** (Laws of 1914, ch. 124, sec* 27; Brown's Miss, and 5ted. S t a t s . , 1925, sec. 27, p . 43 ) . kissoufti. P r i v a t e banks may not now be e s t a b l i s h e d . By an a c t enacted i n the y e a r 1915, t h i s s t a t e p r o h i b i t e d the e s t a b l i s h m e n t of new p r i v a t e banks, the p e r t i n e n t p r o v i s i o n s t a t i n g " t h a t h e r e a f t e r no new p r i v a t e bank s h a l l be e s t a b l i s h e d " . This a c t a l s o contains d e t a i l e d p r o v i s i o n s covering the o r g a n i z a t i o n , operation and supervision of banks and a p p a r e n t l y p e r m i t t e d p r i v a t e banks who were engaged i n a banking b u s i n e s s a t the time of i t s passage to continue the o p e r a t i o n of such b u s i n e s s upon complying with the p r o v i s i o n s covering i n c o r p o r a t e d banks so f a r a s the same are a p p l i c a b l e . " In a d d i t i o n , the a c t contains p r o v i s i o n s s p e c i f i c a l l y a p p l i c a b l e to p r i v a t e banks, these p r o v i s i o n s being s e t f o r t h below. Definition of "private bankers". "Private bankers are declared to be those who carry on the business of banking by receiving money on deposit, with or without interest, by buying and selling bills of exchange, promissory notes, gold or silver coin, bullion, uncurrent money, bonds or stocks, or other securities, and of loaning money, without being incorporated." (Laws of 1915, p. 157; Rev, Stats, of Mo. , 1929, sec. 5403; Banking Laws, 1919, sec. 11781, p. 88.) Capital requirements. A private banker could not engage in business "without a paidup capital of not less than tan thousand dollars, and if said banking business is to be carried on in a city having a population of one hundred and fifty thousand inhabitants or more, then without a paid-up capital of not less than one hundred thousand dollars, * * * ". (Laws of 1915, p. 157; Rev. Stats, of Mo., 1929, sec. 5404; Banking Laws, 1919, sec. 11782, p. 88.) Sworn statement necessary; contents of Before engaging in business a nrivate banker also had to file "a statement, subscribed and sworn to as correct and true before a notary public by each person connected with such business as owner or p a r t n e r , setting forth; First, the names and places of residence of all X-68lp j-.g y 45 "persons i n t e r e s t e d , i n the "business, a l l of whom s h a l l be r e s i d e n t s of t h i s s t a t e , t h e amount of c a p i t a l i n v e s t e d ; and second, the name i n which the "business i s t o "be conducted and. t h e p l a c e a t which i t i s t o "be c a r r i e d on; which statement s h a l l "be acknowledged, recorded i n t h e o f f i c e of the r e corder of deeds of t h e county i n which the "bank i s to be l o c a t e d , and a c e r t i f i e d copy of such recorded instrument s h a l l be f i l e d i n t h e o f f i c e of t h e bank commissioner: * * * " . (Laws of 1915, p . 157; Rev. S t a t s , of Mo., 1929, s e c . 5404; Banking Laws, 1919, sec. 11782, pp. 88 and 8 9 ) . Cashier must give bond; c o n d i t i o n o f . "The c a s h i e r of each p r i v a t e bank s h a l l give bond t o t h e s t a t e of Missouri, f o r such sum, and conditioned, as may be r e q u i r e d by the commissioner, which s h a l l be approved by the commissioner, and f i l e d i n h i s o f f i c e . " (Laws of 1915, p . 158; Rev. S t a t s , of Mo., 1929, sec. 5407; Banking Laws, 1919, sec. 11785, p . 90). License f e e or t a x . "No p r i v a t e banker * * *, a f t e r having made, recorded and f i l e d the statement r e q u i r e d by t h i s a r t i c l e , s h a l l be r e q u i r e d t o pay any l i c e n s e or t a x not r e q u i r e d of banks." (Laws of 1915, p . 158; Rev. S t a t s . of Mo., 1929, s e c . 5408; Banking Laws, 1919, s e c . 11786, p . 9 0 . ) Provisions covering incorporated banks made a p p l i c a b l e . A l l of t h e p r o v i s i o n s of law covering the o r g a n i z a t i o n , operation and s u p e r v i s i o n of incorporated banks " s h a l l , so f a r as t h e same a r e app l i c a b l e , apply t o a l l p r i v a t e bankers doing business i n t h i s S t a t e ; * * * " (Laws of 1915, p . 158; Rev. S t a t s , of Mo., 1929, sec. 5407; Banking Laws, 1919, s e c . 11785, p . 90) Loan on p e r s o n a l s e c u r i t y of owner i n excess of 10# of c a p i t a l p r o h i b i t e d ; v i o l a t i o n cause f o r appointment of r e c e i v e r . A p r i v a t e banker cannot make any loan or discount on t h e p e r sonal s e c u r i t y or o b l i g a t i o n of any owner i n excess of t e n p e r cent of the p a i d up c a p i t a l and surplus of the bank. A v i o l a t i o n of t h i s p r o h i b i t i o n empowers t h e bank commissioner "in h i s d i s c r e t i o n , t o make a p p l i c a t i o n f o r the appointment of a r e c e i v e r f o r such p r i v a t e bank or banker, as now provided by law i n case of i n s o l v e n t banks and t r u s t companies." (Laws of 1915, p . 157; Rev. S t a t s , of Mo., 1929, s e c . 5405; Banking Laws, 1919, sec. 11783, p . 8 9 ) . R e s t r i c t i o n upon use of f u n d s . fl No p r i v a t e banker s h a l l employ any p a r t of h i s c a p i t a l , or any funds deposited w i t h or borrowed by him, i n dealing or t r a d i n g i n , buying or s e l l i n g l a n d s , goods, c h a t t e l s , wares or merchandise, but he may s e l l and dispose of a l l kinds of p r o p e r t y which may n e c e s s a r i l y come i n t o h i s p o s s e s s i o n i n the c o l l e c t i o n of h i s loans or d i s c o u n t s . " (Laws of 1915, p . 158; Rev. S t a t s , of Mo., 1929, s e c . 5406; Banking Laws, 1919, s e c . 11784, p . 89.) X-6812 179 U 46 m Loans t o one "borrower a n d . o t h e r use of f u n d s . A p r i v a t e t a n k e r may not "use or employ h i s c a p i t a l or funds dep o s i t e d with or "borrowed by him i n any other manner than banks a r e * * * p e r m i t t e d , or loan a g r e a t e r amount to any person or loan any sum whatever, except upon l i k e s e c u r i t y as i s r e q u i r e d t o be taken by banks'." (Laws of 1915, p . 158; Rev. S t a t s , of Mo., 1929, sec. 5406; Banking Laws, 1919, sec. 11784, p . 8 9 ) . Surplus of 20$ of c a p i t a l r e q u i r e d b e f o r e p r o f i t s may be d i s t r i b u t e d . The p r o f i t s of a p r i v a t e banker may not be d i s t r i b u t e d "without f i r s t s e t t i n g a p a r t t o s u r p l u s accounts a t l e a s t twenty p e r cent of the net p r o f i t s each y e a r u n t i l t h e surplus equals twenty p e r cent of the c a p i t a l , and s a i d s u r p l u s s h a l l not be diminished except f o r the payment of any l o s s e s which may occur; Provided, i f t h e r e a r e undivided p r o f i t s , the se s h a l l f i r s t be used i n payment of such l o s s e s . " (Laws of 1915, p . 158; Rev. S t a t s , of Mo., 1929, s e c . 5406; Banking Laws, 1919, s e c . 11784, p . 89.) Penalty f o r v i o l a t i o n of p r o v i s i o n s . Any p r i v a t e banker who f a i l s to make and f i l e t h e statement r e quired of i n c o r p o r a t e d banks or so much thereof as t h e bank commissioner may r e q u i r e "or s h a l l f a i l or r e f u s e to make or render any other r e p o r t or statement r e q u i r e d by the banking laws of t h i s s t a t e , or who s h a l l , w i l f u l l y and c o r r u p t l y , make any such statement f a l s e l y , or who s h a l l v i o l a t e any of t h e p r o v i s i o n s of t h i s a r t i c l e (covering i n c o r p o r a t e d and p r i v a t e b a n k s ) , he or they, and each of them s h a l l be deemed g u i l t y of a misdemeanor, and, upon conviction t h e r e o f , upon i n f o r m a t i o n or i n d i c t ment, s h a l l b e punished by a f i n e * f o r each o f f e n s e , not exceeding f i v e thousand d o l l a r s nor l e s s than f i v e hundred d o l l a r s , or by imprisonment not l e s s than one nor more than twelve months i n the c i t y or county j a i l , or by both such f i n e and imprisonment." (Laws of 1915, p . 158; Rev. S t a t s , of Mo., 1929, sec. 5407; Banking Laws, 1919, sec. 11785, p . 9 0 . ) "If a t any time t h e commissioner s h a l l be s a t i s f i e d t h a t any p r i v a t e banker * to which has been i s s u e d an a u t h o r i z a t i o n c e r t i f i c a t e or l i c e n s e , i s v i o l a t i n g any of t h e p r o v i s i o n s of t h i s c h a p t e r , or i s conducting i t s business i n an unauthorized or unsafe manner, or i s i n an unsound or uns a f e c o n d itio n t o t r a n s a c t i t s b u s i n e s s , or cannot w i t h s a f e t y and expediency continue b u s i n e s s , the commissioner may, over M s o f f i c i a l s i g n a t u r e and s e a l of o f f i c e n o t i f y t h e holder of such a u t h o r ! z e t i o n c e r t i f i c a t e or l i c e n s e t h a t the same i s revoked." (Rev. S t a t s , of Mo., 1929, s e c . 5299). MONTANA. Banking b u s i n e s s mav only be t r a n s a c t e d by c o r p o r a t i o n s ; exception,. The laws of t h i s s t a t e provide t h a t " I t s h a l l be u n l a w f u l f o r any c o r p o r a t i o n , p a r t n e r s h i p , f i r m , or i n d i v i d u a l to engage i n or t r a n s X-6812 j 4? . act a "banking b u s i n e s s w i t h i n t h i s s t a t e , except by means of a corporaa t i o n duly organized, f o r such purpose. * * * t h i s (bank) Act s h a l l not apply to any p e r s o n , f i r m or a s s o c i a t i o n now doing a p r i v a t e banking b u s i n e s s ; p r o v i d e d , however, t h a t s a i d p r i v a t e banks hereinabove r e f e r r e d t o s h a l l come under a l l of t h e p r o v i s i o n s of t h i s Act which may be f a i r l y applicable thereto; * • » • » . (Laws of 1927, ch. 89, s e c . 2; Banking Laws, 1927, sec. 2, p . 8) - 43 - X-6812 Advertising "before issuance of cMrtejr;:, penalty -£L<- "It shall "oe unlawful for any individual, firm or corporation to advertise, publish or otherwise promulgate that it is engaged in the banking business without first having obtained authority from the Department of Banking, * * * . Axly such individual, or member of such firm, or officer of any such corporation so offending, shall be deemed guilty of a misdemeanor, and upon conviction thereof, shall be punished as provided by the la'Ts of this State." (lLaws of 1927, ch. 89, see. 107; Banking Laws, 1927, sec. 107, p. 60 ) As stated above, private bankers who wore engaged in the transaction of a banking business as of the passage of the so-called bank act, March 8, 1927, are required to comply with such provisions of the bank act as "may be fairly applicable thereto". The bank act also contains other provisions which are specifically applicable to these private bankers, these provisions being set forth below. ITame of -private bank. The name of a private bank mast contain the name of the individual conducting the business, or, if a copartnership or association, the name of at least one actual and responsible member thereof, 11 in addition to which name there shall be no other designation then the words 'bonk of*, 'Banking house of' * banker *, or 1 bonkers1. nothing in this section shall apply to any person, firm or association now conducting a private banking business in this state, which bank is now authorized by the State Banking Department to do a banking business". (Laws of 1927, ch. 89, sec. 82; Banking Laws, 1927, sec. 82, p. 52 ). "Approved property of ™ist be owned before de-posits may be received Every private batik must before receiving any money on deposit "actually own and possess, within the State of Montana, approved property or assets not exempt from execution of the minimum value" of not less than $20,000; not less than $30,000 in cities and towns having a population of over 2,000 and up to 5,000; not less than $50,000 in cities having a population of 5,000 to 10,000; not less than $75,000 in cities having a population of 10,000 to 25,000; in all cities having a popular tion of 25,000 or over the value of the property or assets must be $100,000. This financial condition must appear and be carried on the books of every private bank and these provisions "shall extend and be applicable separately to each and every private bank conducted by any person, co-partnership, or association, and no asset or assets shall appear on the books of more than one bank." (Laws of 1927, ch. 89, sec. 83; Banking Laws, 1927, sec. 83, p. 53 ). Examinations: rower of State Examiner. Every private bank "shall be subject to examination and visitations of the State Examiner once each year, and oftener when deemed — 49 — X-6812 "necessary by said examine!^ who shb.ll have full power and. authority to investigate and examine all b6oks, papers j and effects of any such "bank or banking house f o r the purpose of ascertaining the financial condition of any such bank or ba_J.cs , and shall have the power in aid thereof to administer oaths t o any person or persons, or the agent or employees of any person or persons conducting such bank or banking business." (Laws of 1927, ch. 89, sec. 84; Banking Laws, 1927, sec. 84, p. 53 ). Heports of' condition; number and nature of;, publication required. The cashier of every private bank is required, on call of the superintendent of banks, to make not less than three reports of condition during each year, anyone of which must be not less than two months apart. These reports must be verified by the cashier, must be made in such form as the superintendent may prescribe, and mast contain a full abstract of the general accounts of the bank and show under appropriate heads the resources and liabilities of the bank. A condensed form of each report must be published in the newspapers and proof of such publication is required to be made to the superintendent. The superintendent also has power to call for special reports whenever he considers that such reports are necessary. (Laws of 1927, ch. 89, sec. 86; Banking Laws, 1927, sec. 86, p. 54 ). Penalty for receiving de-posits while bank is inr,ol~rer.t or for making false .statements or entries. Any person, or the members of any private bank, who receives deposits when such person or private bank is insolvent "or who subscribes or makes any false statement, or. entries in the books of any such bank, or who knowingly subscribes or exhibits any false papers, with the intention of deceiving any person authorizing (authorized) to examine the condition of any bank provided for in this Act, or who wilfully subscribes or makes false reports to the Superintendent of Banks, shall be guilty of a felony, and shall be punishable by imprisonment in the State prison for a uerm not exceeding five (5) years." (Laws of 1927, ch. 89, sec. 87; Banking Laws, 1327, sec. 87, p. 55 ). Pledging of assets. "Ho * * * banker * * * shall, except as otherwise authorized by law, pledge or hypothecate as collateral security for money borrowed, its assets in a ratio exceeding one and one half times the amount borrowed. (except as otherwise authorized by the Superintendent)." (Laws of 1927, ch. 89, sec. 99; Banking Laws, 1927, sec. 99, p. 58 ). Taxation of private banks. The laws of this state also contain detailed provisions covering the taxation of private banks. (Laws of 1927, ch. 64, sec. 1; Banking Laws, 1927, sec. 1 (2067), pp. 78 and 79 ). * 50 w X-6812 , ! 1533 IE3BRASKA. Banking "business may only "be transacted by corporations* The laws of this State provide that the "business of "banking may only be transacted by corporations duly.organized for that purpose. The provisions in this connection read as follows: "The department of trade and commerce shall have general supervision and control of "banks and banking under the laws of this state and no person or persons shall be permitted to engage in or transact a banking business save corporations having complied with the provisions of this article." (Corap. Stat, of Nebraska, 1922, sec. 7982; Banking Laws, 1929, sec. 7982, p. .3 ). "It shall be unlawful for any corporation, partnership, firm or individual to engage in or transact a banking business within this state, except by means of a corporation duly organized for such purpose under the laws of this state." (Comp. Stat, of Nebraska, 1922, sec. 7984; Banking Laws, 1929, sec. 7984, p. 3 ). NEVADA. Private banking business mast be licensed; provisions of bank act applicable. In order to engage in the business of banking in this State a private banker must obtain a license to do so and is subject "as far as may be" to the provisions of law covering incorporated banks. Necessity for license. "No individual, *** banking firm, *** company, *** shall engage in the banking business In this state without first obtaining from the bank examiner a license in the form presented by him, authorizing such individual, firm, *** company, *** to use the name and transact the "business of a bank; ***" (Act of March 22, 1911, sec. 47; Banking Laws, 1930, sec. 47, p. 16 ). Subject to supervision and control of State banking board and bank examiner; bank act made applicable^ "Ih© state board of finance, sitting as the Nevada state banking board, shall have, in connection with the state bank examiner, supervision and control of banks and banking in this state, and no persons, firms, associations, or corporations, shall be peri]ri.tte£. to engage in the banking business in this state, savb in compliance with this (bank) act." (Act of March 22, 1911, sec. 49, ast amended by Laws of 1919, p. 285; Banking Laws, 1930, sec. 49, p. 16 )>. The laws also |: '184 - 51 u X-6812 provide that "All of the provisions of this (bank) act shall he applicable as far as may he to individuals, firms, or associations, as well as to corporations." (Act of March 22,- 1911, sec. 8; Banking Laws, 1930, sec. 8, p, 6 ). Definition of words used in hank act. "The words 1 corporation,' 'hanking corporation,1 'bank*, 1 trust company, or 'banker*, as used in this (bank) act, shall refer to and include banks, savings banks, and trust conroanios, individuals, firms, associations, and corporations of any character conducting the business of receiving money on deposit or otherwise carrying on a banking or trust company business, except as herein specially provided." (Act of March 22, 1911, sec, 75; Banking Laws, 1927, sec* 75, p. 23 ). 1 HEW HAMPSHIRE. Private banks subject generally to banking and taxation laws. The laws of this State provide that "Every association or partnership formed for the purpose of loaning money or dealing in money, receiving deposits, buying or selling exchange or transacting such other business as is usually transacted by banks, shall be a bank for the general purposes of this title and for taxation. The clerk or cashier of every such bank shall make the same returns to towns where its stockholders reside as the cashiers of other banks are by law required to make." (Public Stats., ch. 164, sec. 5; Public Laws, 1926, ch. 260, sec. 24; Banking Law Pamphlet, 1929, ch. 261, sec. 24, p. 9 ). "This title" (XXVI) is that portion of the laws of Hew Hampshire relating to and covering the operation of banks, savings banks, and trust companies; and, apparently,the provision above quoted recognizes a private banking business, but requires such business to be conducted in accordance with, the provisions of the laws relating to incorporated banking institutions and the taxation thereof, in so far as it is possible generally so to do. In addition, the laws contain certain provi* sions which are specifically applicable to private banks. These pro* visions are set out below. Owners deemed stockholders; capital for taxation purposes. "Every person owning any portion of the funds employed in any private bank shall be deemed a stockholder therein. The average amount of the capital of such private bank during the preceding year shall be the capital of such bank subject to taxation as stock." (Public Stats., ch. 164, sec. 6; Public Laws, 1926, ch. 260, sec. 25; Banking Law Pamphlet, 1929, ch. 260, sec. 25, p. 9). 'I - 52 - 185 X-6812 Liability of stockholders> "The stockholders of any private bank shall be liable as partners for all the debts and obligations of the bank." (Public Stats.« ch. 164, sec. 7; Public Laws, 1926, ch. 260, sec. 26; Banking Law Pamphlet, 1929, ch. 260, sec. 26, p. 9). Prohibition against advertising or transacting business as savings bank. No person, partnership or association, "except savings institutions incorporated in this state", can make use of any sign or other form of advertising indicating that the place of business or business carried on is that of a savings bank, or "receive deposits and transact business in the way or manner of a savings bank, or in such a way or manner as to lead the public to believe, or, in the opinion of the commissioner, might lead the public to believe", that the business is that of a savings bank. (Laws of 1907, ch. 112, sec. 2; Public Laws, 1926, ch. 261, sees. 53-55; Banking Law Pamphlet, 1929, ch. 261, sees. 53-55, p. 18). Examination to ascertain whether above provision is being violated. "The commissioner shall have the authority to examine the accounts, books and papers of any ***, person, partnership or association which makes a business of receiving money on deposit in order to ascertain whether they have violated" the provisions last above referred to, and a penalty is prescribed for any such violation. (Laws of 1907, ch. 112, sec. 3; Public Laws, 1926, ch. 261, sees. 56 and 57; Banking Law Pamphlet, 1929, ch. 261, sees. 56 and 57, p. 19). Recovery of penalty and injunction to restrain further prosecution of business. "Any violation of *** (such) provisions *** shall forthwith be reported by the commissioner to the Attorney General; and the forfeiture may be recovered by an information or other appropriate proceeding brought in the superior court in his name. Upon such information or other proceeding the court may issue an injunction restraining such person, partnership, *** from further prosecution of its business within this state during the pendency of such proceeding or for all time, and may make such other order as justice may require." (Laws of 1907, ch. 112, sec. 3; Public Laws, 1926, ch. 261, sees. 58 and 59; Banking Law Pamphlet, 1929, ch. 261, sees. 58 and 59, p. 19). Treasurer of savings bank shall not carry on private banking business. 11 ITo treasurer or person acting as treasurer of a savings bank shall carry on or be engaged in the business of private banking, or shall suffer such business to be carried on in the office of the ban#', and if any person violates these provisions "he shall be fined not more than one thousand dollars, or imprisoned not more . - 53 „ than one year or "both". (Publiq Laws : 186 X-6812 1926, ch. 261, sees. 4 and 5.). NEW JERSEY Penalty for carrying on banking business without authority. "No individual, association of individuals, partnership or joint stock association, shall engage in the business of banking, except under and in accordance 'with the provisions of this act, unless possessed of unencumbered assets of at least fifty thousand dollars, and that any such individual, association of individuals, partnership or joint stock association and the individual members thereof, who shall violate the provisions of this act and carry on the business of banking without authority, shall be guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine not exceeding five thousand dollars, or by imprisonment at hard labor for a term not exceeding seven years, or both." (Laws-of 1925, ch. 189, p, 454; Como. Stat, of If. J., Supplement, 1925-1930, Sec. 17-44.). Private banker must be a citizen of the United States and at least one member of the firm mast reside in State. "No individual or individuals shall engage in the business of banking who are not citizens of the United States, and no individual, association of individuals, partnership or joint stock association, shall engage in the business of banking within this State unless one or more of the persons so engaged shall be residents in and inhabitants of this State, and for every violation of the provisions of this section, the person or persons so offending shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be liable to a fine of not more than one thousand dollars, and in all reports that shall be made by such individual, association of individuals, partnership or joint stock association, the full names and places of residence of each of the persons so interested shall be fully set out." (Laws of 1925, ch. 189, p. 454; Comp. Stat, of I. J., Supplement, 1925-1930, Sec. 17-47.). Insolvency, etc.; commissioner may apply for injunction or receiver. In case it appears from any report made by or any examination of any private bank that such bank is insolvent or is unable to pay its obligations as they severally mature, or is unable to pay its depositors the money held by it on deposit whenever Called upon so to do, or shall suspend its ordinary business for want of funds to carry on the same, or shall not be possessed of unencumbered assets of at least fifty thousand dollars in excess of its liabilities, the commissioner, or any creditor of the bank, may apply "to the chancellor" for an injunction or the appointment of a receiver. If after a hearing, it appears to the chancellor that the private bank is insolvent, or is not able to resume business -. 54 - X-6812 with safety to the publid tod &&#jlltkge td the creditors, or is not possessed of unencumbered assets of at least fifty thousand dollars in excess of its liabilities, the chancellor may issue an injunction to restrain such private hank from further carrying on "business, and if insolvent, from collecting or receiving any debts, or from paying out, selling, assigning or transferring any of the assets, moneys, funds, lands, tenements or effects belonging to it, until the court otherwise orders. (Laws of 1925, ch. 189, p. 455; Comp. Stat, of IT. J., Supplement, 1925-1930, Sec. 17-48.). Certificate of authority necessary to engage in business; examination by commissioner. . "Ho individual, association of individuals, partnership or joint stock association shall engage in the business of banking in this State unless authorized thereunto by the commissioner of balking and insurance by his certificate to that effect, and such certificate shall not be made or issued by the said commissioner until after the said individual, association of individuals, partnership or joint stock association, shall have made to him the report or reports required by this act; and not until after the said commissioner of banking and insurance, or some person appointed by him, shall have made an examination of the affairs and financial condition of such individual, association of individuals, partnership or joint stock association, from which it shell appear to said commissioner that he or they are then solvent and able to pay his or their debts at maturity, and are possessed of unencumbered assets of at least fifty thousand dollars in Excess of his or their liabilities; provided, the commissioner of banking and insurance may refuse to issue such certificates of authorization if in his judgment the interests of the public would be best subserved by such refusal;" (Banking Laws of 1925, ch. 189, p. 456; Comp. Stat, of II. J. , Supplement, 1925-1930, Sec. 17-51.). Advertisements indicating banking business. 11 that no individual, association of individuals, partnership or joint stock association, not authorized under this act to do a banking business, shall make use of any office sign at the place where his or their business is transacted, having thereon any artificial or corporate name or other word or words indicating that such place or office is the place or office of a bank, nor in any manner advertise that he or they are engaged in a banking business, nor make use of or circulate any letterheads, billheads, blank notes, blank receipts, certificates, circulars or any written or printed or partly written and partly printed paper whatever, having thereon any artificial or corporate name or any other word or words indicating that his or their business is that of a bank." (Laws of 1925, ch. 189, p. 456, Comp. Stat, of H. J., Supplement 1925-1930, Sec. 17-51.). - 55 - 188 X-6812 HEW MEXICO . Provisions of "bank act" made applicable to "individuals and copartnerships." The laws of this State provide that "This act shall be known as the 'Bank Act1 and shall be applicable to all corporations, individuals and copartnerships specified in the next section, except as hereinafter specifically excepted." (Laws of 1915, ch. 67, sec. 1; Hew Mexico Stats. Ann., 1929, sec. 13-101; Hew Mexico Bank Code, 1929, sec. 1, p. 5.). The "next section" referred to sets out that "The word 1 Bank' as used in this (bank) act includes every person, firm, coraoany, copartnership or corporation, except national Banks, en-, gaged in the business of banking in the State of Hew Mexico." (laws of 1915, ch. 67, sec. 2; Hew Mexico Stats. Ann., 1929, sec. 13-102; Hew Mexico Bank Code, 1929, sec. 2, p. 5). The bank act provides further that "Then by the provisions hereof anything is required to be done by any incorporated bank, or other corporation, carrying on a banking business under any of the provisions of this act, or by the Board of Directors of any such incorporated bank or corporation, or any officer, director or employee thereof, or their right or power to do a specific act is denied, the same act shall be done, or not, as the case may be, by individuals or copartners engaged in the banking business." (Laws of 1915, ch. 67, sec. 7; Hew Mexico Stats. Ann., 1929, sec. 13-107; Hew Mexico Bank Code, 1929, sec. 7, pp. 5 and 6.). It would appear, therefore, that these provisions have the effect of subjecting persons, firms, copartnerships and unincorporated banks to the same provisions as are made applicable to incorporated banks. In addition the bank act makes the following requirements specifically applicable to private banks: Private bankers engaged in other business in addition to that of banking; capital required; separation of capital; payment of creditors; manner of keeping books; bank act requirements covering reserves, deposits, investments, etc., made applicable. "All persons, (and) co-partnerships * * * engaged in business, a portion only of which is banking, shall set apart and keep separate so much capital for banking as may be necessary for conducting a bank * * *. The capital so set apart and the assets of said bank or banking department shall be first applicable to the payment of the creditors thereof, as distinguished from the general creditors of the persons, (or) co-partnerships * * * conducting the same. Every person, (or) co-partnership * * * so carrying on a banking business in connection with any other business shall keep separate books of account for each banking "business, and shall be governed as to all deposits, reserves, investments and transactions relating to such banking business, by the provisions of this act provided for - 56- X-6812 the control of such banking busineeB» and with respect to said, banking business or banking depar'tifl*ii|. bhall be subject to all the provisions Of this act." (taws of 1915, ch. 37, sec. 9; Hew Mexico Stats. Ann., 1929, sec. 13-109; Hew Mexico Bank Code, 1929, sec. 9, p. 6.). Certified statement as to capital stock, names and residences of copartners, amount of capital owned by each. The bank act provides that "any individual or co-partnership desiring to conduct a banking business shall file in the office of the State Bank Examiner and of the State Corporation Commission a similar statement" as that filed by a corporation. The laws with reference to the statement filed by a corporation provide that "As soon as ten per cent of the capital stock and surplus of the corporation shall be fully paid in cash, a copy of the by-laws of said bank and the oaths of its directors shall be filed in the office of the State Bank Examiner and of the State Corporation Commission, together with a statement executed on behalf of the corporation and sworn to by its president, and cashier or secretary, certifying: the full amount of the entire capital stock of said corporation subscribed; the names and residences of the officers, directors and stockholders of said corporation; the amount of stock owned by each, and the fact that such corporation will be fully prepared to transact the business for which it was organized., upon the payment in cash of the remaining ninety per cent of the capital stock and surplus." (Laws of 1929, ch. 131, sec. 5; Mew Mexico Stats. Jinn., 1929, sec. 13-113; Hew Mexico Bank Code, 1929, sec. 13, p. 7 ). Word "State" may not be used as part of title. "Individuals and co-partners engaged in banking shall not use the word 1 State' as part of the name of the banking business." (Laws of 1919, ch. 120, sec. 4; New Mexico Stats. Ann., 1929, sec. 13-114; Hew Mexico Bank Code, 1929, sec. 14, p. 8). Ownership of stock by co-partners. "Co-partners conducting a bank shall each own at least ten per cent" of the stock of the firm. (Laws of 1929, ch. 131, sec. 6; Hew Mexico Stats. Aim., 1929, sec. 13-117; Hew Mexico Bank Code, 1929, sec. 17, p. 9). Oath required of owners. Every owner of an unincorporated bank, actually engaged in its management, shall annually make an oath that he will diligently and honestly administer the affairs of the bank; that he will not knowingly violate, nor willingly permit to be violated, any provision of the law; and that he is the owner in good faith of the required amount of capital and that this capital is not pledged or incumbered. h 5? u X-6812 fhe State Bank Examiner furnishes blanks for such oath and within twenty days after execution it must be filed with the State Bank jbcaminer. (Laws of 1919, ch; 120; sec. 8; Mew Mexico Stats. Ann., 1929, sec. 13-119; Hew Mexico Bank Code, 1929, sec. 19, p. 9.). Penalty for failure to comply with provisions re oaths. "Every bank failing to comply with the provisions of this section (regarding oaths) shall pay to the State Bank Examiner a penalty of Five Dollars for each day's delay." (Laws of 1919, ch. 120, sec. 8; New Mexico Stats. Ann., 1929, sec. 13-119; Hew Mexico Bank Code, 1929, sec. 19, p. 9). Statement as to names and residences of owners and amount of stock held. "Every bank shall, within twenty days after the first Tuesday in January of each year, upon a form to be furnished by the State Bank Examiner, file with the State Bank Examiner a statement sworn to by * * * at least two owners of an unincorporated bank, disclosing the names and residences of all *** owners thereof, together with the amount of stock or interest held by each. In the event of any change in the * * * owners of any unincorporated bank, such changes shall within twenty days be likewise certified to the State Bank Examiner." (Laws of 1919, ch. 120, sec. 9; Hew Mexico Stats. Ann., 1929, sec. 13-122; Hew Mexico Bank Code, 1929, sec, 22, p. 10). Penalty for failure to comply with provisions re statement. * Every bank failing to comply with the provisions of * * * (the) section (last above quoted) shall pay to the State Bank Examiner a penalty of Five Dollars for each day's delay." (Laws of 1919, ch. 120, sec. 9; Hew Mexico Stats. Ann., 1929, sec. 13-122; Hew Mexico Bank Code, 1929, sec. 22, p. 10 ). Meetings of owners; examination of books, records, etc., required. "The board of directors or owners of every bank shall hold regular meetings once each month. Failure on the part of any director without good cause to attend three consecutive meetings shall be ground for his removal by the #State Bank Examiner. At not less than two of said meetings during each year, which meetings shall be at least five months apart, the board of directors or an auditing committee consisting of at least two members of the board of directors shall make a thorough examination of the books, records, funds, securities and. other property held or owned by the bank, and shall enter upon their minutes the result of such examinations and a certified copy of such entry shall within twenty days from the date thereof be filed with the State Bank Examiner." (Laws of 1929, ch. 131, sec. 7; Hew Mexico Stats. Ann., 1929, sec. 13-123; Hew Mexico Bank Code, 1929, sec. 23, P. 10 ). «> 58 *• X-6812 Penalty for failure, to make attbil examination. iii l i 1 ' ' ii 11 ii il If the own.ors of any bank fail to ma-re or cause to "be made an examination of the books, records, funds, securities and other property held or owned by the bank, each of auch owners is personally liable to a penalty of fifty dollars for every such failure. If this penalty is not paid within thirty days after demand therefor, the State Bank Examiner mast institute civil proceedings to recover the same, Ho owner can be reimbursed out of the funds of the bank on account of any penalty paid, nor can any penalty be paid out of the funds of the bank. (Laws of 1929, ch. isi, sec. 7; New Mexico Stats. Ann. , 1929, sec. 13-123; New Mexico Bank Code, 1929, sec. 23, p. 10). Endorsement of paper of borrower by owner. Ho owner in an unincorporated bank can become endorser for any person, firm or corporation borrowing money therefrom, nor can any note or obligation of such owner be considered as an asset of the bank. (Laws of 1919, ch. 120, sec. 20; New Mexico Stats. Ann., 1929, sec. 13-136; New Mexico Bank Code, 1929, sec. 35, p. 1 5 ) . Declaration of dividend; surplus fund required. The owners may semi-annual1y declare a dividend of so much of the net profits of the bank as has been actually earned and collected; but every bank must before the declaration of a dividend, carry one-fifth of its net profits for the preceding half year to its surplus fund until it amounts to fifty per centum of its capital stock, and such surplus must thereafter be maintained unless impaired by unavoidable losses. (Laws of 1929, ch. 131, sec. 11; New Mexico Stats. Ann., 1929, sec. 13-146; New Mexico Bank Code, 1929, sec. 45, p. 17 ). NET TOBK The laws of this State provide that if a private banker executes and has accepted by the superintendent of banks a certain affidavit, the required contents of which are hereinafter set forth, such banker is exempted from certain other provisions of law. The provisions covering such banker are digested immediately below. A private banker who has not executed and had accepted by the superintendent the so-called exemption affidavit is subject, in addition to the provisions set out immediately below, to certain other provisions. These additional provisions are digested separately and follow after the provisions covering private bankers of the class first above referred to. Definition of private banker. "The term, 'private banker', when used in this chapter, ik 69 - X-6812 "means an individual, who, by himself, or as a member of a partnership or unincorporated association other than an unincorporated erpress company having a contract with a railroad company or railroad companies for the operation of an express Service upon the lines thereof, is engaged in the business of receiving deposits subject to check or for repayment upon the presentation of a pass book, certificate of deposit or other evidence of debt, or upon the request of the depositor, or in the discretion of such individual, partnership or unincorporated association; of receiving money for transmission; of discounting or negotiating promissory notes, drafts, bills of exchange or other evidences of debt; of buying or selling exchange, coin or bullion; or is engaged, in the business of transacting any part of such business. The term, 'private banker', when so used, shall include the executor or — 6 0 *• X-6812 administrator of a deceased private banker and a partnership or unincorporated association of private bankers." (Banking Law , sec. 2 ). Classes of private bankers covered by provisions. The laws of this State provide that the provisions applicable to private bankers, "except as hereinafter further limited, shall apply to every private banker engaged in the business of private banking in the States "1. Who makes use of the word, 'bank,' 'banker, * 'banking* or any derivative or compound of any such word or any words in a foreign language having the same or similar meanings, in or on any sign or any passbook, check, receipt, note, stationery, billhead, certificate, blank, form, pamphlet, circular or newspaper or other advertising matter or ,fho solicits deposits by means of signs or other advertising; or "2. Who pays or credits interest, or pays, credits or gives any bonus or gratuity or any thing of value, except on certificates of deposit actually outstanding at the time this act takes effect, to any depositor on any deposit balance of less than seven thousand five hundred dollars, if such deposit balance is that of any depositor resident in the United States who does not have with such banker during the period in respect of which interest is so paid or credited, an average daily credit balance or securities of an average daily market value, together exceeding seven thousand five hundred dollars; provided the aggregate amount of such deposit balances on which interest is so paid or credited exceeds two per centum of the total deposits of such private banker; or "3. Who receives money on deposit for safekeeping or for any other purpose (other than for transmission to others) in such sums that the average of all the separate deposits so received by such private banker from all depositors during any twelve months' period (or for such period, if less than twelve months, that such private banker has been engaged in such business) is less than one thousand dollars. * * * ; or "4. Who receives from any person at any one time money for transmission to others in any manner whatsoever in amounts of less than five hundred dollars, provided, however, that any private banker may, without thereby becoming subject to the provisions of this article, sell letters of credit, bankers' checks, travellers' checks, bills of exchange, draftp or other similar documents or may make cable transfers in amounts of less than five hundred dollars, if he has deposited and shall keep on deposit with the superintendent of banks interest bearing stocks or bonds of the United States or of this state or of any city, county, town, village or free school district in this state authorized by the legislature to issue the same, in a principal amount equal to one hundred thousand dollars. * * * ". (Banking Law , sec. 150 ). - 61 u X—6812 Business not to be begun w l t h o u t ^ i i t h d r l z a t i . o n c e r t i f i c a t e of superintendent of banks. • * ••• - ' Hone of the business comprised i n the above d e f i n i t i o n of a private banker s h a l l be c a r r i e d on by any " i n d i v i d u a l , p a r t n e r s h i p or unincorporated association" u n l e s s an a u t h o r i z a t i o n c e r t i f i c a t e i s granted by the superintendent of banks. (Banking Law y s e e . 1 5 0 - a ) . Procedure to obtain a u t h o r i z a t i o n c e r t i f i c a t e . Every private banker or o t h e r individual, p a r t n e r s h i p o r u n incorporated association seeking to engage in business a s a p r i v a t e banker must submit to the superintendent of banks a verified certificate in duplicate v/hicli shall state: "1. The full name, residence and post office address of such individual or of each member of,such partnership or unincorporated association. "2. The state, or country, of which each individual named in such affidavit is a citizen. "3. The amount of permanent capital such individual, partnership or unincorporated association has kept invested in his business as a private banker or has deposited in cash to be invested in such business which shall be not less than the amounts hereinafter specified "(a) Fifteen thousand dollars if"the place where the business is to be transacted is an incorporated or unincorporated village having a population which does not exceed two thousand; "(b) Twenty-five thousand dollars if the place where tiiu business is to be transacted is incorporated or unincorporated village having a "ncpuiation of two thousand or more and less thau ten thousand; . "(c) Fifty thousand dollars if the place where the business is to be transacted is an incorporated or unincorporated village or a city having a population of ten thousand or more and loss than thirty thousand; "(d) One hundred thousand dollars if the place where the business is to be transacted is a cit^ having a population of thirty thousand or more, "4. The place at which such business is to be transacted. "5. If such private b inker is engaged in business as a private banker in a city the population of which exceeds one hundred and seventy-five thousand, the amount of deposit balance upon which such - 62 - X-6812 private "banker pays or credits interest or pa/8, credits or gives any "bonus or gratuity or anytMhg of ^alue to a deposi tor and the average of the separate deposits of such private "banker since January first, nineteen hundred thirty, or for a period of twelve months immediately preceding the date of such verified certificate, exclusive of dividend checks, coupons or. other small collection items collected "by such private "banker for customers in the ordinary course of "business in; or, if the applicant lias not already engaged in such "business, said certificate shall state the minimum deposit balance upon, which such applicant proposes to pay or credit interest or to pay, crcdit or sive such bonus or gratuity, or thing of value. •• "Such certificate shall be verified by such individual or by one or more members of a partnership or unincorporated association, in the discretion of the superintendent, upon a form prepared by the superintendent of banks, which shall state that the affiant or affiants have read such certificate and that the facts therein stated are true." (Banking Law , sec. 151). When the superintendent receives the verified certificate, he must ascertain whether the character, responsibility and general fitness of the person or persons named in such certificate are such that the business of the proposed private banker M i l be honestly and efficiently conducted and whether the public convenience and advantage will be promoted by allowing such proposed banker to engage or continue in business. The superintendent is also required to ascertain whether the facts stated in the certificate are true in case the private banker has not submitted with it the so—called exemption affidavit or such affidavit has been refused by the superintendent. After the superintendent lias satisfied himself that it is expedient and desirable to permit such private banker to engage or continue in "business, he may approve the certificate and mast immediately give notice of the approval to the private banker. (Banking Law , sec. 23 ). Revocation of authorization certificate or license by superintendent: effect of. "If at any time the superintendent shall be satisfied that any private banker * * * is violating any of the provisions of this chapter, or is conducting its business in an unauthorized or unsafe manner, or is in an unsound or unsafe condition to transact its business, or can not with safety and expediency continue business, the superintendent may, * * * notify the holder of such authorization certificate or license that the same is revoked." (Banking Law, sec. 29 ) It is also provided that "Whenever the superintendent shall have revoked his authorization of any such private banker, and shall have taken the action to make such revocation effective specified in section twenty-six of this chapter (section twentysix provides for the revocation of the superintendent's acceptance u £3 «*• [ 196 X-6812 of the affidavit entitling private bankers to certain exemptions, and this section and the seption covering the exemption affidavit ate Set out hereinafter), all the rights and privileges of such banker, resulting from such preceding authorization, shall forthwith cease and determine." (Banking Law , sec. 158). Conditions precedent to transacting business* Ho private banker can engage or continue in business until (a) the amount of permanent capital required by law is invested in the business, or is deposited in cash to be so invested, and (b) the superintendent of banks has issued an authorization certificate and has filed such certificate in his office. (Banking Law , sec. 152.) When the authorization certificate has been issued and filed by the superintendent of banks, a private banker is subject to all of the provisions relating to private bankers. (Banking Law , sec. 152). Permanent unimpaired capital mast be maintained; if impaired, superintendent may issue order to make deficiency good. Every private banker mast keep unimpaired in his banking business the amount of permanent capital specified in the verified certificate. (Banking Laws, sec. 154). Whenever it appears to the superintendent that the capital has been reduced below the requirements of law, he may issue an order directing that such deficiency be made good immediately or within a time specified in such order. (Banking Law , sec. 56), Capital may be increased or decreased. "From time to time, with the written approval of the superintendent and upon good cause shown, such permanent capital may be increased or decreased." (Banking Law , sec. 154). Segregation of investment of capital and deposits. "All securities, property and the evidences of title thereto, in which the permanent capital of and the deposits with any such private banker have been invested shall be segregated and kept separate and apart from all other property and assets of such private banker." (Banking Law , sec. 155 ). Reserves required against deposits. Every private banker is required to maintain total reserves against deposits in the following amounts (Banking Law , sec. 157 ): 18 per cent of demand deposits if located in a borough having a population of 1,500,000 or over; and at least 12 per cent of such deposits shall be maintained as reserve on hand. ; - 64 - 197 X-6812 \ 15 per cent of demandflefolsitsif located in a "borough of 1,000,000 and. less than 1,500,000 population and with no office in a "borough of 1,500,000 or over} and at least 10 per cent of such deposits shall "be maintained as reserves on hand. 12 per cent of demand deposits if located elsewhere in the state; and at least 4 per cent of such deposits shall "be maintained as reserves on hand. (Banking Law , sec. 112 ). Failure to maintain required reserves; penalties; superintendent may issue order to make deficiency good. If any private "banker fails to maintain the required reserves, "the superintendent shall levy an assessment upon it during such period as any encroachment upon its total reserves amounting to one per centum or more of its aggregate demand deposits shall continue", at certain prescribed rates. (Banking Law , sees. 30 and 157 ). The superintendent is given power, where a private "banker refuses or fails to pay any such assessment or any penalty or forfeiture incurred under any provision of law, or where he violates any prohibition of law, to "report the facts to the Attorney General, who shall thereupon, in the name of the superintendent, institute such action or proceeding as the facts may warrant" against such private "banker. (Banking Law , sec. 31 ), The superintendent is also given power, whenever it appears to him "that either the total reserves or reserves on hand of any such * * * private banker * * * are "below the amount * * * required "by law to "be maintained, or that such * * * "banker is not keeping its reserves on hand" to issue an order "directing that such * * * "banker make good such reserves forthwith or within a time specified in such order, or that it keep its reserves on hand" as required "by law. (Banking Law , sec. 56 ). Reports of condition required. "It shall be the duty of the superintendent to require all * * * private bankers * * * to make to him * * * regular periodical reports of their condition * * * and he shall prescribe the form and contents of all such reports. In addition to such regular reports he may require any such * * * banker * * * to make special reports to him at such times and in such form as he may prescribe, and may direct that such special reports be verified and prescribe the form of the verification. "He shall at least once in every three months, designate some day therein in respect to which * * * every such private banker * * * (except such as have obtained certain exemptions through the filing of the affidavit hereinafter set forth ) shall report to him, and he shall serve a notice designating such day." (Banking Law , sec. 42 ), Examinations may be made by superintendent. All private 'bankers engaged in business in cities or elsewhere in the State, from and after July 31, 1930, "shall be subject at all times to full and complete examinations by the superintendent or by his deputies, examiners or employees when duly authorized." (Banking Law , sec. 150-a). Ucunber of examinations required. "The superintendent shall, either personally or by his deputies or examiners, at least twice in each year visit and examine * * * every private banker" subject to the provisions of law relating to private bankers, except such as have obtained certain exemptions through the acceptance by the superintendent Of the affidavit hereinafter set forth. Private bankers who have had this affidavit accepted are only subject to examination once during each year. The superintendent is given power to examine private bankers "whenever, in his judgment, such examination is necessary or expedient. "On every such examination inquiry shall be made as to the condition and resources of such * * * , banker * * * the mode of conducting and managing its affairs, * * *, the investment of its funds, the safety and prudence of its management, the security afforded to those by whom its engagements are held, and whether the requirements of its charter and of law have been complied with in the administration of its affairs; and as to such other matters as the superintendent may prescribe. "The superintendent may also either personally or by his deputies or examiners, make such special investigations as he shall deem necessary to determine whether any individual, copartnership, unincorporated association * * * is violating, or has violated any of the provisions of this chapter; and to the extent necessary to make such determination the superintendent shall have the right to examine the relevant books, records, accounts, and documents." (Banking Law , sec. 39). Penalty for refusal to •permit examination. A penalty is imposed for the refusal of a private banker to permit an examination or investigation of its affairs. (Banking Law , sees. 38 and 150-a). Unlawful or unsafe practices: superintendent may issue order to discontinue. "Whenever it shall appear to the superintendent that *** any private banker * * * has violated its charter or any law, or is conducting its business in an unauthorized or unsafe manner, he may issue an order directing the discontinuance of such unauthorized or unsafe practices and requiring the delinquent to appear before him, «• s56 — X-68X2 "at a time and place fixed in said order, to present any explanation in defense of the practiced directed in said order to be discontinued." (Banking Law , sec. 56). Business of delinquent banker may "be taken over by superintendent; and examinati ons may be made. "The superintendent may forthwith take possession of the business and property of * * * any private banker * * * whenever it shall appear that such * * * banker: 1. 2. manner; Has violated its charter or any law; Is conducting its business in an unauthorized or unsafe 3. Is in an unsound or unsafe condition to transact its business; 4. Cannot with safety and expediency continue business; 5. Has an inpairment of its capital; 6. Has suspended payment of its obligations; 7. Has neglected or refused to comply with the terms of a duly issued order of the superintendent; 8. Has refused, upon proper demand, to submit its records and affairs for inspection to an examiner of the banking department; 9. Has refused to be examined upon oath regarding its affairs." (Banking Law , sec. 57). The superintendent, after he has taken possession of the property and business Of a private banker, may make examinations and institute Or con time inquiries until such banker resumes business or is finally liquidated in accordance with law. (Banking Law , sec. 39). Circumstances under which possession of superintendent may terminate* "When the superintendent shall have do?.y taken possession of such * * * private banker * * *, he may hold such possession until its affairs are finally liquidated by him, unless: (1) he shall have permitted, such * * * banker to resume business * * *; (2) the superintendent shall have been directed by order of the supreme court to surrender such possession * * *; * * *; (4) the depositors and other creditors of such banker * * * and the expenses of such liquidation shall have been paid in full." (Banking Law , sec. 58). ' -. 67 - :• ; X-6812 Superintendent may pertoit rflswngtlojft of business, "The superintendent may, upon such conditions as may tie approved by him, surrender possession for the purpose of permitting such * * * "banker * * • t o resume business.; but the superintendent shall not authorize any reduction of capital stock or capital as one of the terms of such resumption** (Banking Law * s e c . 61)» liquidation; various provisions in relation thereto. There are a number of detailed provisions with reference to the liquidation of the affairs of private bankers by the superintendent of banks. These provisions provide for the appointment of special deputies, assistants, etc., by the superintendent to assist him, the payment of expenses, the procedure to obtain possession of pleadings, etc., in actions in which attorneys' liens are asserted, the notification to those holding assets of the private bank of the fact that the superintendent has taken possession of such bank and the effect of such notification, the inventory of assets, the disposition by the superintendent of property held by the liquidating banker as bailee or as depositary, the liquidation and conservation of assets, the deposit of moneys collected by the superintendent, the appearance in suits, and the execution of instruments, etc., by the superintendent on behalf of the liquidating banker, the proof of claims by creditors, the listing of claims by the superintendent, the filing of objections to claims, the acceptance or refusal of claims by the superintendent, the effect of a lien on a judgment recovered by the superintendent after taking over a private banker, and the disposition of dividends to creditors. (Banking law , sect. 62-75). Change of location. , • • v>x. v'\ \ ' A private banker may change the location of l^ie business with the permission of the superintendent of banks. (BatiriLng law * sees* 50 and 159). Affidavit entitling private banker to certain exemptions; contents of; ex tent of exempt!ons. "Any: such private banker authorized by the superintendent to engage in such business, or who has appli3d for such authorization, may submit to the superintendent an affidcvr:Lb executed in duplicate and verified in the sajae manner as the (verified) certificate * * * upon a form to be furnished by the superintendent containing a statement as follows; "1. If such private banker is engaged in business elsewhere than in a city having a population of on%hundred and seventy-five thousand or more, that such private banker has permanently invested 2Q0 - 68 - ! 201 X-6812 "in this state in his banking business immediately ^receding the date of such affidavit, a caoital over and above all his liabilities as such private banker at leafrt equal to the minirauifl required by" the verified certificate; or "2. If such private banker is engaged in business as a private banker in a city having a population of one hundred and seventyfive thousand or more: "(a) That such private banker has permanently invested in this state in his banking business immediately nrdeeding the date of such affidavit a capital of at least one hundred thousand dollars over and above all his liabilities as such private banker. "(b) That such private banker will not pay or credit or advertise to nay or credit any interest or pay, credit or give any bonus or gratuity whatever or anything of value to any depositor on a deposit balance with such private banker of less than five hundred dollars. "(c) That the average of the separate deposits * * * received by such private banker during the twelve months immediately preceding the date of such affidavit, for safekeeniig or for any other purpose, exclusive of dividend checks, coupons, or other small collection items collected by such private banker f or customers in the ordinary course of business, and also the average of the separate deposits received during such period for transmission to others, is three hundred dollars or more." After the date upon which the superintendent has accepted and filed in his office such affidavit, and until such acceptance is revoked by the superintendent, the provisions hereinafter set out do not apply to such private banker, but such banker is subject to all of the provisions above set out. "The superintendent may at any time in his discretion require any such private banker to file an affidavit containing a statement as above specified and as of a date fixed in said request." "In the event of the failure of such private banker so to do, or of the refusal of the superintendent to accept and file said affidavit all of the subsequent sections of this article (i.e., sections 1S1-175, inclusive) shall be applicable to such private banker". (Banking Law, sec, 160 ). Investigation by superintendent of statements made in affidavit; refusal or acceptance of affidavit. If, upon receipt by the superintendent of the affidavit above referred to, it fails to comply in form and substance with the requirements set out above, "he shall refuse to file it for examination until the defect or defects therein shall have been remedied". If such affidavit complies, or has been so amended as to comply, in all respects w 69 * X-6812 202 with the requirements tho superintendent shall, "by such investigation as he may deeii necessary* satisfy himself whether the facts stated in Such affidavit are true. If the facts are found to be untrue, the superintendent shall f&f&se to accept the affidavit* If the superintendent shall "be satisfied that the facts stated are true, he shall accept the affidavit and shall forthwith give notice of the acceptance to such private "banker. (Banking Law , sec. 25) • Revocation of acceptance of affidavit; effect of revocation. If at any time the superintendent has reason to believe that any private banker whose, affidavit he has accepted "is not keeping permanently invested in this state in his banking business the amount of capital specified in such affidavit, or, that such banker is paying or crediting or advertising to pay or credit any interest, or is paying, crediting or giving any bonus or gratuity whatever or anything of value, on deposits of less than the amount stated in such affidavit, or that any material statement in such affidavit was in fact untrue, the superintendent shall forthwith institute such investigation as he shall deem necessary to ascertain the truth of such facts and may examine or cause an examination to be made into the. books, papers and affairs of such private banker so far as may be necessary for such purposes. If from such investigation or otherwise the superintendent shall be satisfied that such banker is not keeping such capital so invested, or, that such banker is paying or crediting or advertising to pay or credit any interest, or is paying, crediting or giving any bonus or gratuity whatever or anything of value, on deposits of less than the amount stated in such affidavit, or that any material statement in such affidavit was in fact untrue, the- superintendent may, over his official signature, notify such private banker that the acceptance of such affidavit is revoked. Such notice shall be executed in triplicate and the superintendent shall transmit one copy to such private banker, attach another to the duplicate of such affidavit on file in his own office and file the third copy thereof in the county clerk's office in which the other duplicate of such affidavit has been filed." (Banking Laws, sec. 26). It is also provided that "Whenever the superintendent shall have revoked his authorization of any such private banker, and shall have taken the action to make such revocation effective specified in section twenty-six of this chapter (this is the section last above quoted) all the rights and privileges of such banker, resulting from such preceding authorization, shall forthwith cease and determine." (Banking Law , sec. 158). Additional Provisions Applicable To A Private Banker Who Has Not Executed The So-called Exemption Affidavit. Investment of permanent, capital and deposits ^ "Every such private banker may, subject to the limitations and restrictions contained in this article, invest his permanent capital 203 U 70 - X-6812 "and the deposits received "by hint infeutihz'eal or personal securities, or real and personal property, consistent with safety and prudence of management as he may deem proper, provided the security afforded depositors is not imperiled "fry such investments#* (Banking Law , sec# 162). Prohibitions against investments or loans of capital and deposits# "So such private canker, however, Shall appropriate to his own use or lend to any person or persons with whom he is associated as a partner, or invest in any business conducted by a partnership of which such private banker is a member, or lend directly or indirectly to any corporation of which he is the legal or equitable owner to the amount of twenty-five per centum or upwards of the issued capital stock of such corporation, any part of his permanent capital or of the deposits received by him." (Banking Law , sec. 162). Real Estate and certain securities; when to be sold. "All real estate which shall hereafter be purchased or otherwise acquired by any such private banker with his permanent capital or with money received by him on deposit or to whidh such private banker shall have taken title in connection with his business as such private banker, except that upon which his office is located, shall be sold within five years after taking title thereto; and all real estate so purchased or acquired, and held by such private banker at the time when this act takes effect, except that upon which his office is located, shall be sold within five years after this act takes effect; unless upon his application the superintendent of banks shall, in either case, have extended the time within which such sale shall be made. "All such real estate and all registered securities and mortgages purchased by any such private banker with any part of his permanent capital or vd. th money received by him on deposit, or held by any such private banker on the date when this act takes effect, shall be sold within one year after such date unless prior to the expirati on of such year, such real estate or registered securities or mortgages shall have, been recorded in the name of such private banker * * * (Banking Law , sec. 163), Restrictions on purchase of. and loans on real estate. ; "No such private banker shall hereafter purchase with any part of his permanent capital or deposits received by him any real estate which is subject to a mortgage, lien or encumbrance; nor make a loan, directly or indirectly, upon the security of real estate if such real estate is subject to a prior lien or encumbrance and the amount unpaid upon such prior mortgage, lien or encumbrance or the aggregate amount unpaid upon all prior mortgages, liens and encunybrances exceeds ten per centum of the permanent capital of such ^ 204 - 71 - X-6812 "private "banker, and, if the litiOunt secured, including all prior mortgages, liens and encumbrances, exceeds two-thirds of the value of such real estate." (Banking Law , sec. 164). Books and records; superintendent may issue order to keep properly. "Every such private "banker shall keep separate and complete "books of account in which shall be promptly entered the details of all "business transacted by him as such banker including statements in detail of the liabilities incurred by him as such banker and of the securities or property in which the permanent capital and the deposits received by him have been invested." (Banking Law , sec. 165). Every private banker is required to keep his books and records in such manner as the superintendent may direct (Banking Laws, sec. 165), the superintendent being authorized to "issue an order requiring such * * * banker * * * or the officers thereof or any of them, to open and keep such books or accounts as he may in his discretion, determine and prescribe for the purpose of keeping accurate and convenient records of the transactions and accounts of such * * * banker" whenever it appears to him that any private banker, except those who have had accepted the so-called exemption affidavit, "does not keep its books and accounts in such manner as to enable him readily to ascertain its true condition." (Banking Law , se6. 56). Penalty for failure to obey order regarding books and accounts. "Any such banker that refuses or neglects to obey any such order shall be subject to a penalty of one hundred dollars for each day that such refusal or neglect continues." (Banking Law , sec. 165). Report regarding unclaimed deposits. There are detailed provisions with reference to reporting to the superintendent of banks regarding unclaimed deposits. This report must be made annually and must state whether or not any unclaimed deposits are being held. Publication of a copy of such report is required to be made in the newspapers and a penalty of $100 per day is imposed for each day such report or the filing of an affidavit of proof of its publication with the superintendent is delayed or withheld. (Banking Law , sec. 166). Transmission of money. The laws contain provisions regulating the transmission of money by private bankers. Money received for transmission must be forwarded within five days after being received and a receipt must be given to the person delivering such money for transmission. A penalty is prescribed for a violation of these provisions. (Banking Law , sees. 167 and 168). I 205 - 72 - X-6812 Monthly statement required, of jftirtllhases and sales of property and discounts, loans or other advances. A written verified statement is required to be filed monthly by private bankers with the superintendent of banks in which must be listed all purchase and sales of property made in connection with their business arid all discounts, loans or other advances made by them, including overdrafts and renewals, since the last preceding statement. A description of the collateral if any, to such indebtedness mast also be made. Discounts, loans, etc., however, of less than $100 may be omitted from such statement unless they increase by $100 the liability of some individual, partnership, toincorporated association dit corporation since the last statement. (Banking La* * 6eci 169). Members of private bankers required to meet monthly. "The members o f any such partnership or unincorporated asso- ciation of private "bankers s h a l l on or before the tenth day of each month meet for the purpose of considering the conditions and affairs of the banking business conducted by them" and of making the statement above referred to and such statement shall be verified by each member * * * except in case of disability or unavoidable absence." (Banking Law , sec. 169). Reports of condition required. A private banker who has not executed the so-called exemption affidavit is required to make reports of his condition to the superintendent every three months upon service of notice by him of the day on which such reports mast be filed. (Banking Law , sec. 42). Within ten days after service of this notice on him "every such private banker shall make a written report to the superintendent of banks, which report shall be in the form and shall contain the matters pre* scribed by the superintendent and shall specifically state the items of permanent capital, deposits, specie and cash items, public secoiw ities and private securitios, real estate and real estate securities and such other items as may be necessary to inform the public as to his financial condition and solvency or which the superintendent may deem proper to include therein, and shall also state the amount of deposits with him, the payment of which in case of insolvency is preferred by law or otherwise over other depositors. It shall state in detail the particular assets in which the permanent capital of such private banker is invested. Every such report shall be verified by the oath of such private banker and of each member of a partnership or aiv •unincorporated association of private bankers to the effect that the report is true and correct in all respects to the best of the knowledge and belief of such banker or bankers and that the usual business of such banker has been transacted at the location stated in the (verified) certificate (hereinbefore referred to) * * *, ~ sfe *• X-6812 "and not elsewhere. In case of the disability or unavoidable absence of a member of a partnership or unincorporated association, sudh report may be verified by the other members; but the verification shall contain a statement of the reason for the failure of any member to sign and verify such report* Every such report, exclusive of the verification shall within thirty days after it shall have been filed . with the superintendent be published by such private banker in one newspaper of the place where such private banker is engaged in business or if no newspaper is published there, in the newspaper published nearest to such place." (Banking Law , sec. 170). Special reports of condition. Every such private banker shall also make such other special reports to the superintendent as he may from time to time require in such form and on such dates as may be prescribed by the superintendent, which reports shall if required by the superintendent, be verified in such form as he may prescribe. (Banking Law , sec. 170). Penalty for failure to make report of condition or include therein required information. If any private banker fails to make any required report on or before the date designated for the making thereof or fails to include therein any matter required by the superintendent, such private banker shall forfeit the sum of one hundred dollars for every day that such report is delayed or withheld and for every day that it fails to report any such omitted matter, unless the time therefor has been extended by the superintendent. (Banking Laws, sec. 170). An extension of time not exceeding ten days may be granted by the superintendent "for satisfactory cause to him shown" within which such reports may be filed. (Banking Law , sec. 49). Restrictions as to place of business* A private banker shall not do business, or be located in the same room with, or in a room connecting rdth any bank, thrust company, savings bank, or national banking association* (Banking Law , sec. 171). Communications from superintendent must be submitted to members and noted on records. Each official communication 'from the superintendent or one of his deputies to any private bank relating to an examination or irw vestigation or containing suggestions or recommendations as to the conduct of the business, shall be submitted by the member receiving it to all the members of such private bank at their next meeting and. duly noted on their records. (Banking Law , sec. 172). 2 0 7 - 74 - X-6812 CAROLINA, Private banks permitted but subject to same laws and supervision as incorporated banks. The following provisions recognize a private banking business, but indicate that such business is subject to the same provisions of law and supervision as are imposed upon incorporated banks. Definition of term "bank?1. The law provides that "The term 'Bank' when used in this chapter shall be construed to mean any corporation, partnership, firm, or individual receiving, soliciting, or accepting money or its equivalent on deposit as a business: Provided, however, this definition shall not be construed to include building and loan associations, Morris Plan Companies, industrial banks or trust companies not receiving money on deposit." (Consolidated Statutes of Forth Carolina, sec. 216(a); Banking Laws, 1927, sec. 216(a), p. 3 ). Private banks made subject to bank act and supervision of Corporation Commission. "Every bank, corporation, partnership, firm, company, or individual, now or hereafter transacting the business of banking, or doing a banking business in connection with any other business, under the laws of and within this State, shall be subject to the provisions of this chapter, and shall be under the supervision of the Corporation Commission. The Corporation Commission shall exercise control of and supervision over the banks doing business under this act, and it shall be its duty to execute and enforce through the Chief State Bank Examiner, the State Bank Examiners, and such other agents as are now or may hereafter be created or appointed, all laws which are now or may hereafter be enacted relating to banks as defined in this chapter." (Consolidated Statutes of Forth Carolina, sec. 222(a); Banking Laws, 1927, sec. 222(a), p. 32). Promulgation of regulations covering transaction of business. "For the more complete and thorough enforcement of the provisions of this act, the Corporation Commission is hereby empowered to promulgate such rules, regulations, and instructions, not inconsistent with the provisions of this chapter, as may in its opinion be necessary to carry out the provisions of the laws relating to banks and banking as herein defined, and as may be further necessary to insure such safe and conservative management of the banks under its supervision as will provide adequate protection for the interests of the depositors, creditors, stockholders, and public in the relations with such banks. All banks doing business under the provisions of this chapter mm — X-6812 "shall • conduct their "business in a manner consistent with all laws relating to banks and "banking, and all rules, regulations, and instructions that may "be promulgated or issued by the Corporation Commission." (Consolidated Statutes of ITorth Carolina, sec. 222(a); Banking Laws, 1927, sec. 222(a), p. 33 ). Reports of condition required. In addition to subjecting private banks to the provisions of law covering incorporated banks, the bank act expressly provides that "Every person, firm, * * *, or partnership doing a banking business, or a banking business in connection with any other business, shall make to the Corporation Commission not less than three reports (of condition) daring each year, on forms prescribed by the Corporation Commission. If any person, firm, * * *, or copartnership shall show by said reports, or by the examination of any State bank examiner, that * * * (the) liabilities are equal to the amount of the capital stock * * *, the Corporation Commission shall have authority, and is hereby empowered, to make such rules and regulations for the reduction of said liabilities as it may deem necessary for the protection of the creditors and depositors of such banking institution." (Consolidated Statutes of North Carolina, sec. 222(c); Banking Laws, 1927, sec. 222(c), p. 33 ). Advertising banking business and use of banking terms; when private banks may use. " "Ho person, association, firm, * * *, domiciled within the State of North Carolina, except * * *, persons, associations, or firms reporting to and under the supervision of the Corporation Commission, or under the Supervision of the Insurance Commissioner, shall therein advertise or put forth any sign as bank, banking, banker, or trust company, or use the word bank, banking, banker, or trust as a part of its name and title; * * * * . Any violation of the provisions of this section shall be a misdemeanor, and upon conviction thereof the offender shall be fined in a sum not exceeding five hundred dollars for each offense." (Consolidated Statutes of North Carolina, sec. 224(c); Banking Laws, 1927, sec. 224(c), p. 38 ). NORTH DAKOTA. Private banking business apparently prohibited. "Ho person excepting national banking corporations shall transact a banking business nor use the words bank, banking company or banker in any sign, advertisement, letterhead or envelope or in any corporate or firm name, without complying with and organizing under the provisions of this Chapter" relating to the business of banking. (Compiled Laws of 1913, sec. 5177; Banking Laws, 1929, sec. 5177, p. 209 U 7$ - X-6812 23). "This chapter" does not contain any provisions authorizing or covering the organization of a private tank, and it would seem that the effect of the above quoted provision is to prohibit a private banking business. Penalty for violation of above provisions. "Any person violating the provisions of this section, either individually or as an interested party in any association or corporation, is guilty of a misdemeanor, and on conviction thereof shall be fined not less than five hundred nor more than one thousand dollars, or imprisoned in the county jail not less than ninety days, or both, in the discretion of the court." (Compiled Laws of 1913, sec. 5177; Banking Laws, 1929, sec. 5177, p. 23 ). OHIO Unincorporated banks may not now be established. "2To authority to transact a banking business in this State shall be granted, except to a corporation duly organized and qualified for that purpose. Unincorporated banks now authorized to transact and actually transacting a banking business may continue such banking business in the city, village, or township in which they are now located so long as they comply with the provisions of this act." (General Code, sec. 710-76; Banking Laws, 1928, sec. 710-76, p. 29 ). "Unincorporated bank?' defined; scope of term "Board of directors." "The following definitions §iall be applied to the terms used in this act; * * * The term 'unincorporated bank' shall include every unincorporated person, firm or association transacting banking business in this state; and the term 'board of directors' shall include the owner or owners of such banks." (General Code, sec. 710-1; Banking laws, 1928, sec. 710-1, p. 5 ). "Banking business" defined; word "bank?1, unless otherwise stated, includes unincorporated banks. "The term 'bank' shall include any person, firm, association, or corporation soliciting, receiving or accepting money, or its equivalent, on deposit as a business, whether such deposit is made subject to check or is evidenced by a certificate of deposit, a pass-book, a note, a receipt, or other writing, and unless the context otherwise requires as used in this act includes * * * * unincorporated banks; * * *". (General Code, sec. 710-2; Banking Laws, 1928, sec. 710-2, p. 5 ). 210 - 77 - X-6813 From the above provisions, it appears that unincorporated "banks transacting a banking business at the time the act containing these provisions became law, are iaa.de subject to the provisions covering incorporated banks wherever this may appropriately be done. In addition, such unincorporated banks are specifically made subject to the following provisions. Capital required; segregation necessary, purpose of. Every unincorporated bank in cities or villages of two thousand or less population is required to have a paid-in capital of not less than $10,000; in cities or villages of more than two thousand to ten thousand population, fee paid-in capital must be $25,000; and in cities of over ten thousand population, the paidin capital must not be less than $50,000. This capital must remain in the possession of the bank as its property, and is to "be used for its sole purposes and for the security of its creditors". The capital shall at all times be segregated from any other property of the owners of the bank and shall be kept and maintained unimpaired for the security of the creditors of such bank*. All unincorporated banks are required to comply with these provisions within one year. (General Code, sec. 710-78; Banking Laws, 1928, sec. 710-78, p. 30 ). Advertising capital; restriction upon. 2io unincorporated bank "shall advertise by newspaper, letterhead, or in any other way, a larger capital than has been actually paid in". (General Code, sec. 710-81; Banking Lavs, sec. 710-81, p. 31 j. Statement completely describing bank must be filed annually with superintendent of banks. Every unincorporated bank, on or before January 31st of each year shall, under oath, file with the superintendent of banks, a full and complete detailed statement containing the following: 1. The name of the bank. 2. A copy of the articles of co-partnership or agreement under which the business of such bank is being conducted. One of the owners of such bank is required at all times to be a resident of the State of Ohio. 3. The location of the bank. 4. The amount of the permanent actually paid in capital of the bank which is in its possession as its property and for its sole purposes. - 73 5. A statement of tHe responsibility and net worth of the individual members of the bank. 6. The names of the officers, agents or employees in active charge of the bank if such names are not given in the articles of co-partnership or agreement. (Act approved April 18, 1929, sec. 1, p. 4; General Code, sec. 710-77 ). X-6S13 2 1 1 Fames under which property must be held. All real or personal property owned by an unincorporated bank must be held in the designated name of the bank or in the name of an individual as trustee therefor, and not in the name of the owners of the bank. (General Code, sec. 710-79; Banking Laws, 1928, sec. 710-79, p. 30). Assets, when exempt from attachment or execution. All of the assets of an unincorporated bank are exempt from attachment or execution by any creditor of the owners until all of the liabilities of the bank have been naid in full. (General Code, sec. 71079; Banking Laws,.1928, sec. 710-79, p. 30). Restriction against owners using funds for private use. "ITo person, firm or association owning or conducting an unincorporated bank shall use any of the funds of such bank for his or their private business; except as a borrower in due course of business." (General Code, sec. 710-79; Banking Laws, 1928, sec. 710-79, p. 30) . Depositors have first lien on assets. "The depositors in any unincorporated bank shall have first lien on the assets of such bank, in case it is wound up, to the amount of their several deposits, and for any balance remaining unpaid, such depositors shall share in the general assets of the owner or owners alike with general creditors." (General Code, sec. 710-80; Banking Laws, 1928, sec. 710-80, p. 30 ). List of owners must be posted and changes must be reported to the superintendent of banks. — — i A list of the owners of any unincorporated bank, and a statement to the effect that the bank is unincorporated must be posted in the room in which the bank transacts its business. Any subsequent changes must be shown in the list and a report of all such changes must be made to the superintendent of banks. (General Code, sec. 710-81; Banking Laws, 1928, sec. 710-81, pp. 30 and 31 ). I - 79 Advertising matter mast contain wdfd X-6812 2 1 2 unincorporated*'. Every -unincorporated, "bank must have printed, on all its advertising matter and. business stationery, the word "unincorporated" immediately following the name of the firm or business title. (General Code, sec. 710-82; Banking Laws, 1928, sec. 710-82, p. 31 ). Reports of unincorporated "banks, publication required. All reports of unincorporated banks are required to be kept on file in the office of the superintendent of banks, and are open to the inspection of all persons, at the discretion of the superintendent. These reports must be published in the newspaper by the banks, and proof of such publication must be furnished to the superintendent. (General Code, sec. 710-83; Banking Laws, 1928, sec. 710-83, p. 31'). Unincorporated banks may be designated as depositories of State funds. Unincorporated banks are permitted to bid upon and be designated depositories for State funds upon furnishing such surety or sureties as is prescribed by law. (General Code, sec. 710-84; Banking Laws, 1928, sec. 710-84, p. 31 ). Loans to any one person, corporation, etc. The laws contain provisions prescribing the amount which an unincorporated bank may loan to any one person, company, corporation or firm. (Act approved April 18, 1929, sec. 1, (710-122); General Code, sees. 710-122 and 73.0-123; Banking Laws, 1928, sees. 710-122 and 710-123, p. 49). Voluntary liquidation. The laws also permit an unincorporated bank to go into voluntary liquidation and contain detailed provisions with reference to the procedure to be followed by the bank and the powers and duties of the superintendent of banks before and during the actual liquidation of the bank. (General Code, sec. 710-85; Banking Laws, 1928, sec. 710-85; pt>. 31 and 32). OKLAHOMA. Banking,business may only be transacted by corporations "authorized by the laws of the State of Oklahoma or of the United States". The laws of this State provide for the incorporation of a "banking corporation" and authorize such corporation to engage in the business of banking. (Conro. Oklahoma Stats., 1921, sec. 4114; Banking Laws, 1926, sec. 1, p. 10), The incorporation of a trust company is also provided for (Laws of 1925, ch. 55, amending sec. 4190, Comp. Oklahoma Stats., 1921; Banking Laws, 1926, sec. 1, p. 61); and such company is authorized to I - 80 - 213 X-6812 engage in the banking business, (taws of 1925, ch. 56, amending sec. 4216, Conrp. Oklahoma Stats. , 1921; Banking Laws, 1926, sec. 5, p. 74). Unless authority to engage in the banking business is obtained under these provisions, the transaction of such business by any individual or corporation is prohibited, the laws in this connection providing that "It shall be unlawful for any individual, firm, or association, or corporation to receive money upon deposit or transact a banking business except as authorized by the laws of the State of Oklahoma, or of the United States, or to iise dr advertise, in connection with any business other than the banking business, Conducted under the banking laws of this State, the words: Banker, bankers, investment banker, or any other word or term calculated to deceive the public into belief that such person, firm, association or corporation, is engaged in the banking business." (Conrp. Oklahoma Stats., 1921, sec. 4129; Banking Laws, 1926, sec. 44, p. 31). (See also Levy v. Heed, 1918, 690 Okla. 180, 170 Pac. 497). Penalty for violation of above provision. "Any person, firm, association or corporation violating any of the provisions of this section, either individually or as an interested party, in any firm, association or corporation shall be guilty of a misdemeanor, and upon conviction thereof, shall be fined in a sum not less than three hundred dollars ($300.00) nor more than one thousand ($1,000.00) dollars, or by imprisonment in the county jail not less than thirty days nor more than one year, or by both such fine and inn prisonment, *** (Comn. Oklahoma Stats., 1921, sec. 4129; Banking Laws, 1926, sec. 44, p. 31). Enforcement of provisions and prevention of further violations. it *** it is hereby made the duty of the Attorney General to enforce the provisions of this section; and in order to further prevent the violation of the section, any court of competent jurisdiction in this State is hereby authorized and empowered to grant an Injunction and to appoint a receiver to take charge of the business and assets of any person, firm, association or corporation found guilty of violating the provisions of this section, and to make all necessary and proper orders to wind up such business and prevent a violation of this section." (Comp. Oklahoma Stats., 1921, sec. 4129; Banking Laws, 1926, sec. 44, p. 31). OREGON. Banking business may only be transacted by corporations. "It shall be unlawful for any corporation, partnership, firm or individual to engage in or transact a banking or trust business within this state, except by means of a corporation duly organized - 81 - X-*6812 "for such purpose." (Laws of 1925, ch. 207, sec. 2; Banking Laws 1925, including amendiiBnts of 1929, sec. 2, p. 4). "No person, firm, company, association, copartnership or corporation, either domestic or foreign, except national banks, not subject to the suxrvision of the superintendent of "banks and not required by the provisions of this (bank) act to report to him, and which has not received a certificate to do a banking or trust business from the superintendent of banks, shall *** solicit or receive deposits or transact business in the way or manner of a bank, savings bank or trust company, or in such a way or manner as to lead the public to believe that its business is that of a bank, savings bank or trust company." There are also prohibitions against the use of the word Dank, banker, etc., or any other form of advertising indicating that the business carried on is that of a bank. "Every person, firm, company, association, copartnership or corporation doing any of the things or transacting any of the business *** (referred to) mast transact such business according to the provisions of the bank act.***" (Laws of 1925,^ch. 207, sec. 54; Banking Laws, 1925, including amendments of 1929, sec. 54, pp. 19 and 20). Violation of provisions; power of superintendent of banks: -penalty# The superintendent of banks has authority to examine the ao* counts, books and papers of every person, firm, association or copartnership in order to ascertain whether such person, firm, association or copartnership has violated or is violating any provision of the section last above referred to. Any person, firm, association or copartnership violating any provision of this section mast pay a penalty of $100 a day for every day during which such violation continues. Upon an action brought by the superintendent of banks an injunction may be issued restraining any such person, firm, copartnership or association from further using such words or from further transacting business in such a manner as to lead the public to believe tnat the business is that of a bank, savings bank or trust company, and the court issuing the injunction may make such other order as may be proper. (Laws of 1925, ch. 207, sec. 54; Banking Laws, 1925, including amendments of 1929, sec. 54, pp. 19 and 20 ). PENNSYLVANIA. License to engage ir business of private banking required* Except as hereinafter provided, "no individual, partnership, or unincorporated association shall hereafter engage, directly or indirectly, in the business of receiving deposits of money for safekeeping or for the purpose of. transmission to another, or for any other purpose, without having first obtained from a board, consisting of the State Treasurer, Secretary of the Commonwealth, the Secretary of Banking, - hereinafter referred to as the 1Board1, - a license to engage in such business." (Act of June 19, 1911, P. L. 1060, sec. 1, 215 - 02 - X-6812 as amended by Act of April 6» 163?. 106, Fdi 73, sec. 1, and Act of April 25, 1S29, P. L. 813, sec. 1; Pardon'8 Penna. Stats., Title 7, sec. 711, p. 175). The Board to License Private Bankers has been reorganized and continued by the provisions of the Pennsylvania Administrative Code of April 9th, 1929, P. L. 177, Section 202 of Article II of that Code provides that "The following boards, commissions, and offices are hereby placed and matie departmental administrative boards, commissions, or offices, as the case may be, in the respective administrative departments mentioned in the preceding section, as follows: . . . . . . In the Department of Banking, Board to License Private Bankers." Section 428 of Article IV of the Administrative Code provides that "The Board to License Private Bankers shall consist of the Secretary of Banking, who shall be chairman thereof, the Secretary of the Commonwealth, and the State Treasurer." Section 1604 of Article XVI of the Administrative Code provides with respect to the powers and duties of the Board to License Private Bankers that "Subject to any inconsistent provisions in this act contained, the Board to License Private Bankers shall continue to exercise the powers and perform the duties vested in and imposed upon the said board by the act, approved the nineteenth day of June, one thousand nine hundred and eleven (Pamphlet Laws, one thousand and sixty), entitled 'An Act to provide for licensing and regulating private banking in the Commonwealth of Pennsylvania, and providing penalties for the violation thereof,' its amendments and supplements Statement required of applicant. The applicant for a private banking license must file a written verified statement with the Secretary of Banking showing the amount of the assets and liabilities of the applicant and designating the place where the applicant proposes to engage in business, with the names and addresses of ail partners or members of the private bank. It mast also be shown that the applicant is a citizen of Pennsylvania; or, if the applicant is a partnership or unincorporated association, that a majority of the members having a controlling interest in the business are citizens of Pennsylvania. (Act of June 19, 1911, P. L. 1060, sec. 1, as amended by Act of April 5, 1927, P. L. 106, Ho. 73, sec. 1, and Act of April 26, 1929, P. L. 813, sec. 1; Purdon's Penna. Stats., Title 7, sec. 711, p. 175). Bond must be filed; purpose and amount of. A bond executed by the applicant and a surety or sureties approved by the board, mast also be filed with the Secretary of 83 - X-6812 Banking to cover the faithful holding and repayment of all moneys received on deposit and the faithful transmission of any money which is received for transmission to another. The bond must also, in the case of insolvency or bankruptcy, cover the payment of the amounts recoverable to the assignee, receiver or trustee of the applicant for the benefit of the person making a deposit or delivering money for transmission to another. The amount of the bond is to be fixed by the board but is not to be less than $10,000 nor more than $50,000. (Act of June 19,'1911, P. L. 1060, sec. 1, as amended by Act of April 5, 1927, P. L. 105, Uo. 73, sec. 1, and Act of April 28, 1929, P. L. 813, sec. 1; Purdon's Penna. Stats., Title 7, sec. 712, pp. 177 and 178). Money and securities may be deposited in lieu of bond. Money and securities equal to the amount of the penalty fixed in the bond may be deposited by the applicant with the Secretary of Banking in lieu of such bond. The securities may consist of bonds of the United States, or bonds of the State of Pennsylvania or any municipality thereof, or other securities approved by the board. (Act of June 19, 1911, P. L. 1060, sec. 1, as amended by Act of April 5, 1927, P. L. 106, Mo. 73, sec. 1, and Act of April 25, 1929, P. L. 813, sec. 1; Purdon1s Penna. Stats., Title 7, sec. 712, p'» 178.). Examination of applicant's standing; publication of application. Upon receiving an application for a private banking license, "the Secretary of Banking shall cause to be made an examination of the financial standing and moral character of the applicant, as to whether the statements contained in the application are true" and this application must be advertised in the newspaper by the Secretary of Banking at the expense of the applicant. (Act of June 19, 1911, P. L. 1060, sec. 1, as amended by Act of April 5, 1927, P. L. 106, No. 73, sec. 1, and Act of April 26, 1929, P. L. 813, sec. 1; Pardon's Penna. Stats., Title 7, sec. 713, p. 179). License issued in discretion of board; fee; when location may be changed. After advertisement of the application, "the board ipay, in its discretion, approve or disapprove the application". If approval is granted, the bond, or any money or securities deposited in lieu thereof, shall be accepted and held by the Secretary of Banking for the purpose for which required, and he shall issue a license authorizing the applicant to engage in a private banking business at the place specified in the license certificate. A fee of fifty dollars is required for such a license, which may not be transferred or assigned. X-6812 - 84 The written approval of the board is required for the transaction of.business at any place other than that specified in the license certificate. (Act of June 19, 191*1, P. L. 1060, sec. 1, as amended by Act of April 5, 1927, P. L. 106, No. 73, sec. 1, and Act of April 26, 1929, P. L. 813, sec. 1; Purdon's Penna. Stats., Title 7, sec. 713, p. 179). License mast be posted; duplicate license may be issued. The license must be posted in the place of business of the licensee and it is made unlawful to post such license in a place other than that designated as the licensee's place of business. Provision is also made for the issuance of a. duplicate license in case the original is lost or destroyed. (Act of June 19, 1911, P. L. 1060, sec. 1, as amended by Act of April 5, 1927, P. L. 106, Ho. 73, sec. 1, and'Act of April ' 26, 1929, P. L. 813, sec. 1; Pardon's Penna. Stats., Title 7, sec. 714, p. 180). Bonds and money or securities constitute trust funds for depositors. The money and securities deposited with the Secretary of Banking and money which may be paid on any bond in case of default, constitutes a trust fund for the benefit of depositors in the private bank and of such persons who have delivered money to such bank for transmission to another. Such beneficiaries are entitled to an absolute preference as to such moneys or securities over all general creditors of the bank. In the event of the insolvency or bankruptcy of the bank, such moneys and securities, on the order or judgment of a court of competent jurisdiction, must be delivered by the Secretary of Banking to the assignee, receiver or trustee of the bank designated in suph order or judgment. (Act of June 19, 1911, P. L. 1060, sec. 1, as amended by Act of April 5, 1927, P. L. 106, No. 73, sec. 1, and Act of April 26, 1929, P . L. 813, sec. 1; Purdon's Penna. Stats., Title 7, sec. 715, p. 180). : - 85 - JC-6812 Distribution of assets ,1a c&Be. ci|plfl86Xyer.,c^i In case of the insolvency of any private banker, the distribution of the assets, other than the proceeds from the bond or securities deposited, shall be made and preferred in the following order: 1. To the payment of all depositors of the private banker. Bona'fide holders of certified chocks, or of certificates of deposit, or of checks or drafts of the private banker given in exchange for or in payment of checks or drafts of depositors drawn on the private banker, not exceeding the balance to the crodit of the depositor, are also treated as depositors within the meaning of this section. 2. To the payment and discharge of all the remaining liabilities of the private banker. 3. If there is anything remaining, it is distributed to the individual or the partners or members of the private banker according to their legal rights. (Act of June 19, 1911, P. L. 1060, sec. 1, as amended by Act of April 5, 1927, P. L. 106, No. 73, sec. 1, and Act of April 26, 1929, P. L. 813, sec. 1; Pardon's Penna. Stats., Title 7, sec. 716, p. 181). List of licenses granted mast be published annually; interest on deposits in lieu of bonds; custody of such deposits. On the first day of January, the Secretary of Banking mast print annually a list of all licenses granted and unrevoked. Ho mast also pay over to each licensee all of the interest received by him upon any money or securities deposited in lieu of the bond. All money or securities mast be turned into the State Treasury and receipted by the State Treasurer to the Secretary of Banking and the depositor, and is subject to withdrawal only upon the warrant of the Secretary of Banking. All interest coupons on any securities deposited shall be surrendered when due to the owners upon their request. (Act of June 19, 1911, P. L. 1060, sec. 1, as amended by Act of April 5, 1927, P. L. 106, Ho. 73, sec. 1, and Act of April 26, 1929, P. 1. 813, sec. 1; Pardon's Penna. Stats., Title 7, sec. 717, p. 182). Satisfaction or release of mortgage deposited as security in lieu of "bond. The laws contain provisions for the satisfaction or release of any mortgage, judgment or lien which may be accepted in lieu of a bond. (Act of May 23, 1913, P. L. 334, sec. 1; Pardon's Penna. Stats., Title 7, sec. 718, p. 182). Character of books which must be kept. Each private bank must keep such books of account as are approved by the Secretary of Banking. Such books mast show full and 3 1 8 36 - X-6812 complete records of all business transacted, and a full statement of all assets and liabilities. (Act of June 19, 1911, P. L. 1060, sec. 2; Purdon'8 Penna. Stats., Title 7, sec. 719, p. 183). Statement of assets and liabilities, and publication of, required. Each private bank is required at least two times each year to file with the secretary of banking a written statement, under oath and in such form as the secretary may prescribe, of the amount of its assets and liabilities. This statement must be made as of such days as the secretary may designate by a written notice mailed to the private bank and within ten days after the date of such notice. A copy of the statement must also be published in the newspapers. (Act of June 19, 1911, P. L. 1060, sec. 2; Purdon's Penna. Stats., Title 7, sec. 719, p. 183). Revocation of license; notice of discontinuance of business. The license may be revoked by the board for cause shown, and if it is revoked or surrendered, no refund of the license fee will be made. In case the license is revoked, it must be surrendered within twenty-four hours after written notice of such revocation has been given to the holder, and the bond or money and securities received from the private bank "shall continue to be held by the Commissioner (Secretary) of Banking until otherwise directed by the order or judgment of a court of competent jurisdiction". In case of a discontinuance of business, "notice thereof must previously have been published once a week during the thirty days in one newspaper of general circulation, and the legal periodical, if any, published in the city or county where such business has been conducted, or nearest adjacent county". (Act of June 19, 1911, P. L. 1060, sec. 2; Purdon's Penna. Stats., Title 7, sec. 719, p. 183). Violations; penalties. Any person, partnership, or unincorporated association transacting a banking business without a license, or who carries on such business after the license has been revoked, or who, without such license, uses the word "banking" or any equivalent term in advertising the business, or who fails to display the license certificate, or who fails to keep books and make reports as required, or who advertises or publishes in any manner, "either orally or in writing, any statement intended to convey or actually conveying the idea or impression that such licensee is in any way under the supervision of this State, or of any officer thereof, or that this State, or any officer thereof, has passed in any way whatsoever upon the responsibility, solvency, or qualifications of such licensee to engage in such business; or that this State, or any officer thereof, has examined any accounts of said licensee or has in any way certified that such licensee is in any way a fit person to carry on such business, shall be guilty of a misdemeanor, and punished as hereinafter provided." (Act of June 19, 1911, P. L. 1060, sec. 3; Purdon's " 220 ^ 39 ^ X-6812 Penna. Stats., Title 7, see. 720, p. 18?). False swearing as to certain facts. Any person who, in any application for a private bavJclng license or in any report, shall s^ear falsely as to the amount of the assets and liabilities of a licensee, or in any other particular or in any affidavit shall sv;ear falsely as to any fact therein stated, shall "be-guilty of perjury. (Act of June 19, 1911, P. L. 1060, sec. 4; Purdon's Penna. Stats., Title 7, sec. 721, p . 184). Failure to ragke or publish reports; penalty. Any private bank which fails to make any required report or to publish any reports as required within the specified time, must forfeit the sum of twenty dollars for every day that such report or its publication is delayed or withheld. (Act of June 19, 1911, P. L. 1050, sec. 5; Purdon's Penna. Stats., Title 7, sec.722, p. 184). Recovery of money deposited for transmission; burden of proof in suit. There are also provisions fixing the burden of proof in an ac tion against a. licensee to recover money deposited with such licensee for transmission. (Act of June 19, 1911, P. L. 1050, sec. 6; Purdon's Penna. Stats., Title 7, sec. 723, p. 185). Forwarding of money for foreign transmission. Money received far transmission to a foreign country by any licensee must be forwarded within five days after its receipt and every person who fails to so forward within the specified time is guilty of a misdemeanor and punishable as" hereinafter provided. (Act of June 19, 1911, P. L. 1060, sec. 7; Purdon's Penna. Stats., Title 7, sec. 724, p. 185). Applicability of foregoing provisions. The above provisions became effective on December 1, 1911, and they applied "to all persons now or hereafter engaging in said (private banking) business" excipt as provided under the following caption entitled "Exceptions from foregoing provisions". (Act of June 19, 1911, P. I. 1060, sec. 13; Purdon*s Penna. Stats., Title 7, footnote to sec. 711, p. 176). Exceptions from foregoing provisions. The foregoing provisions shall not apply: (1) To any corporation authorized to do business under the Pennsylvania banking laws, to any corporation authorized to receive deposits under the laws of Pennsylvania, nor to any national bank. - 30 - X-6812 : (2) To any hotel keeper who receives money for safekeeping from a guest* 221 (3) io any express, steamship or telegraph company receiving money for transmission. (4) To any individual, partnership, or unincorporated association who would otherwise be required to comply with the foregoing provisions, "who shall file with the Commissioner (Secretary) of Banking a bond, in the sum of one hundred thousand dollars, approved by the board as to form and sufficiency for the purpose, and conditioned as *** (provided above), where the business is conducted in a city of the first or second class; and if conducted in a city of the first class, and if conducted elsewhere in the State, such bond shall be in the sum of fifty thousand dollars; or in lieu thereof, money or securities approved by the Commissioner (Secretary) of Banking, of the same amounts; Provided, however, That the Secretary of Banking shall examine the books, papers, and affairs of such individual, partnership, or'unincorporated association, and if satisfied from the examination that the business of such individual, partnership, or unincorporated association is conducted in an unauthorized or unsafe manner or is in an unsafe or unsound condition to continue business, he may, after hearing had upon due notice given with the approval and consent of the Attorney General, take possession of the business and property of such individual, partnership, or unincorporated association, and shall then proceed in the same manner as provided by law he shall proceed after having taken possession of the business and property of any *** person subject to the supersvision of the Banking Department. If in the opinion of the Secretary of Banking the business of any such individual, partnership, or unincorporated association is in such an unsafe and unsound condition that immediate action is necessary, the Secretary may forthwith, without such hearing and consent of the Attorney Generali take possession of the business and property of such individual, partnership, or unincorporated association; !***" (5) To any individual, partnership, or unincorporated association, licensed under the laws of Pennsylvania to do a brokerage business, holding a membership in a lawfully incorporated brokerage exchange, and doing only such banking as is incidental to such brokerage business. The books or records showing the deposit or account of any depositor with any individual, partnership, or unincorporated association filing the bond, money, or securities referred to above, are not subject to any visitorial power, inspection, or examination by the Commissioner (Secretary) of Banking, except as hereinbefore provided; nor* to examination or inspection by, or production in, any department or agency of the government, State or municipal; nor to inspection, examination, or production in any court in any judicial proceeding except in cases of insolvency or bankruptcy, or a judicial proceeding or investigation involving the rights and liabilities of a creditor or depositor. (6) To any person, firm, partnership, or unincorporated association engaged in business as private bankers "continuously and in the same locality" for a period of seven years prior to June 19, 1911. - 89 - X-5812 (Act of June 19, 1911, p. L« 1060, sec. as amended, by Acts of May 2, 1925, P. L. 502, sec. 1, and W e h 17, 192?, p. L. 39, sec. 1; Purdon's pennai S tats4; T i t l e 7, sec. 725, p p . 195-187). Other violations. Any private 'banker '"ho violates any of the foregoing provisions, "the violation of which has not hereinbefore been made a misdemeanor or a felony, shall be guilty of a misdemeanor, and. punished as hereinafter provided". (Act of June 19, 1911, P. L. 1060, sec. 9; Purdon's Penna. Stats., Title 7, sec. 726, p. 187.). Penalty for violations. "Svery person found guilty of a misdemeanor under any of the *** (foregoing provisions) shall he sentenced to an imprisonment not exceeding two years, or be fined in an amount not exceeding one thousand dollars, or both or either, at the discretion of the court." (Act of June 19, 1911, P. L. 1060, sec. 10; Purdon's Penna. Stats*-, Title 7, sec. 727, p. 187). Definition of "person". The word "person" as used below "means an individual, a partnership, or an unincorporated association". (Act of June 15, 1923, P. L. 809, sec. 2, as amended by Act of May 5, 1927, P. L. 762, sec. 1; Purdon's Penna. Stats., Title 7, sec. 2, p. 13). Department of Banking; scope of supervision; powers; duties. "There shall continue to be a separate and distinct department, known as the Department of Banking, charged with the supervision of all the *** persons hereinafter described, and with the duty of- taking care that the laws of this Commonwealth in relation thereto shall be faithfully executed, and that the greatest safety to the depositors therein or therewith and to other interested persons shall be afforded. *** The said supervision, duties, and powers shall *** extend and apply to all private or unincorporated banks, except such as are or shall - be exempted by law, and to all such individuals, partnerships, and unincorporated associations, as are or shall be by law made subject to the supervision of said department, ***«" (Act of June 15, 1923, P. L. 809, sec. 4; Purdon's Penna. S t a t s . , T i t l e 7, s e c . 4 , p p . 14 and 15 ) . Assessment against -persons to pay expenses of banking department; failure or refusal to pay. All the expenses of the department of banking including the cost of regular examinations "shall be charged to and paid by the *** persons subject to the supervision of the department, in equitable proportions, at such times and in such manner, as the secretary shall by general rule or regulation annually prescribe: * * * " For a failure or refusal, after thirty days written notice, to pay any sum lawfully assessed or charged by the secretary, the 2 3 - 90 - X-6812 secretary "shall call upon the Department of Justice to bring an . action at lato to recover the same". (Act of June 15, 1923, p. L. 809, sec. S, as amended by Acts of April 13, 1927, ?. L. 182, sec, 1, and April 25, 1929, P. I. 716, sec. 1; Purdon's Ponna. Stats., Title 7, sec. 9(b), pp. 17 and 18 ). Examination of. "Every *** person included within the supervision of the department ***, together with all the property, assets, and resources of such *** person, shall be subject to inspection and examination" by the secretary, his deputies, or any qualified examiners of the department of banking. (Act of June 15, 1923, P. L. 809, sec. 13; Purdon's Penna. Stats., Title 7, sec. 13, p. dumber and character of examinations; powers of examiner, reports of It is the duty of the secretary at least once each year, to examine the books, papers, and affairs of every person subject to the supervision of the department of banking. The examiner is empowered to make a thorough examination into all the business and affairs of the person and of all property, assets and resources wherever situated. The examiner also has power to examine under oath or otherwise, any of the officers, agents, employees or members of such person in possession of any assets or having knowledge of any assets of the person. The examiner is required to make a full and detailed report of the condition of the person who was examined, or such special report as may be directed by the secretary. (Act of June 15, 1923, p. L. 809, sec. 14, as amended by Act of May 5, 1927, p. L. 762, sec. 5; purdon's Penna. Stats., Title 7, sec. 14 (a), p. 21 ). Special examinations; cost of. "The secretary may also at any' time, make such special investigations or examinations as, in his opinion, the exigencies of any case may require"; and his power and duties and the powers and duties of any examiner assigned by him to conduct such special examination are the same as in the case of regular examinations. (Act of June 15, 1923, ?. L. 809, sec. 14, as amended by Act of May 5, 1927, p. 1, 762, sec. 5; purdon's Penna Stats., Title 7, sec. 14 (a), p. 21). "The expenses incurred in connection with any special examination or investigation of any * * * person * * * shall be charged to and paid by such * * * -person." (Act of June 15, 1923, p. 1. 809, sec. 9, as amended by Acts of April 13, 1927, p. L. 182, sec. 1, and April 25, 1929, P. 1. 716, sec. 1; Pardon's Penna. Stats., Title 7, sec. 9 (b), p. 18). - 91 F a l s e testimony of o f f ! c o r , ev^t'gy^e X-6812 etc* to examiner; p e n a l t y . I ! The w i l f u l f a l s e s h e a r i n g i n any i n q u i r y i n s t i t u t e d "by an examiner during an examination by a n y . o f f i c e r , a g e n t , e m p l o y e or member of any p e r s o n " s h a l l be p e r j u r y , and s u b j e c t , upon c o n v i c t i o n t h e r e o f , to the same punishment as i s or may be provided by la*7 f o r t h e punishment of p e r j u r y . Upon f a i l u r e of any of the i n d i v i d u a l s , a f o r e s a i d , to make answer to any such i n q u i r y , the A t t o r n e y General, upon r e q u e s t of the s e c r e t a r y , s h a l l make i n f o r m a t i o n t h e r e o f t o the c o u r t , whereupon s a i d c o u r t , a f t e r h e a r i n g , s h a l l make such o r d e r as the occasion r e q u i r e s . " (Act of June 15, 1923, P . 1 . 809, s e c . 14, as amended by Act of May 5, 1927, p . L. 762, s e c . 5; P a r d o n ' s Penna. S t a t s , , T i t l e 7, s e c . 14 ( b ) , p . 2 2 ) . Reports of c o n d i t i o n ; number and c h a r a c t e r o f ; p u b l i c a t i o n r e q u i r e d . . Every person s u b j e c t to t h e s u p e r v i s i o n of the department of banking mast make t o the s e c r e t a r y not l e s s than two nor more than f i v e v e r i f i e d r e p o r t s of c o n d i t i o n during each y e a r , the number, form and manner of such r e p o r t s to be p r e s c r i b e d by the s e c r e t a r y . Each r e p o r t mast e x h i b i t i n d e t a i l and under a p p r o p r i a t e heads the r e s o u r c e s and l i a b i l i t i e s of t h e person a t the c l o s e of b u s i n e s s on any p a s t day s p e c i f i e d by the s e c r e t a r y , and mast be s e n t to him w i t h i n f i v e days or w i t h i n such f a r t h e r time a s he may a l l o w , a f t e r t h e r e c e i p t of the s e c r e t a r y ' s r e q u e s t t o make such r e p o r t . A b s t r a c t summaries of two of t h e r e p o r t s , d e s i g n a t e d by the s e c r e t a r y , i n each year mast be p u b l i s h e d i n a newspaper and proof of such p u b l i c a t i o n mast be f u r n i s h e d t o the s e c r e t a r y . (Act of June 15, 1923, P . L. 809, s e c . 15; P a r d o n ' s Penna. S t a t s . , T i t l e 7 , s e c . 15, p p . 22 and 23 ) , S p e c i a l r e p o r t s of c o n d i t i o n . "The s e c r e t a r y s h a l l have power to c a l l f o r a s p e c i a l r e p o r t from any * * * p e r s o n undfer the s u p e r v i s i o n of the department, * * * whenever, i n h i s judgment, the same may be n e c e s s a r y to a f u l l and complete knowledge of * * * h i s c o n d i t i o n . " (Act of June 15, 1923, P . L. 809, s e c . 15; P a r d o n ' s Penna. S t a t s . , T i t l e 7, s e c . 15, p . 23). R e p o r t s and p u b l i c a t i o n s r e q u i r e d above to be i n l i e u of a l l s i m i l a r r e p o r t s and p u b l i c a t i o n s h e r e t o f o r e r e q u i r e d . The laws of t h i s S t a t e p r o v i d e t h a t "The r e p o r t s and p u b l i c a t i o n s provided f o r i n * * * ( t h e above p r o v i s i o n s r e l a t i n g to r e g u l a r and s p e c i a l r e p o r t s of c o n d i t i o n ) s h a l l be i n l i e u of a l l r e p o r t s and of a l l p u b l i c a t i o n s f o r s i m i l a r purposes h e r e t o f o r e r e q u i r e d by law to be made." (Act of June 15, 1923, P. L. 809, s e c . 15; P a r d o n ' s Penna. S t a t s . , T i t l e 7, s e c . 15, p . 2 3 ) . This p r o v i s i o n a p p a r e n t l y has the e f f e c t of r e p e a l i n g t h a t p o r t i o n of the Act of June 11, 1911 ( P . L. 1060, s e c . 2; P a r d o n ' s Penna. S t a t s . , T i t l e 7, s e c . 719, p . 2f- - 02 - X-6812 • 1 8 3 ) , h e r e i n b e f o r e r e f e r r e d to utiddf t h e Caption t i t l e d "Statement of a s s e t s and l i a b i l i t i e s j and p u b l i c a t i o n o f , r e q u i r e d " , which r e q u i r e s p r i v a t e banks t o f i l e i n the o f f i c e of the S e c r e t a r y .of Banking a sworn s t a t e m e n t of i t s a s s e t s and l i a b i l i t i e s and to p u b l i s h a copy of such s t a t e m e n t i n t h e newspapers. F a i l u r e to make or p u b l i s h r e p o r t s ; p e n a l t y . A p e n a l t y i s p r e s c r i b e d i n case a person f a i l s to make and t r a n s mit and t o p u b l i s h any r e p o r t of c o n d i t i o n r e f e r r e d to above. (Act of June 15, 1923, P . i . 809, s e c . 15; Purdon's Penna. S t a t s . , T i t l e 7, s e c . 15 ( b ) , p . 2 3 ) . Report of g r o s s , r e c e i p t s to Department of Revenue and payment of tax thereon. The laws of t h i s S t a t e a l s o r e q u i r e a p r i v a t e banker on or b e f o r e t h e f i r s t Monday of December of each y e a r , t o make a w r i t t e n sworn s t a t e m e n t t o the Department of Revenue i n which mast be s e t f o r t h t h e f u l l amount of " h i s g r o s s r e c e i p t s from commissions, d i s c o u n t s , a b a t e m e n t s , allowances, and a l l o t h e r r e c e i p t s " a r i s i n g from h i s b u s i n e s s d u r i n g the year ending w i t h the 30th day of November p r e c e d i n g the d a t e of such r e t u r n , "and s h a l l f o r t h w i t h pay i n t o t h e S t a t e Treasury, through the Department of Revenue, one p e r centum upon the a g g r e g a t e amount of such g r o s s r e c e i p t s * * * " . (Act of May I S , 1861, p . L. 708, s e c . 1, as amended by Acts of June 27, 1895, P . 1 . 396, s e c . 1, June 13, 1901, P. 1. 559, 2To. 266, and A p r i l 25, 1929, P. L. 679, s e c . 1; Act of A p r i l 9, 1929, P . L. 343, Art V I I , s e c . 719 a ) . "All * * p r i v a t e bankers s h a l l be r e q u i r e d t o pay l i c e n s e as h e r e t o f o r e , in a d d i t i o n t o the amounts which t h e y s h a l l be r e q u i r e d , t o pay under the p r o v i s i o n s of t h i s A c t . " (Act of May 16, 1861, P . 1 . 708, s e c . 4 ) . A d d i t i o n a l r e p o r t t o Department of Revenue upon commencing b u s i n e s s . "Every p r i v a t e banker, h e r e a f t e r commencing b u s i n e s s i n t h i s Commonwealth, whether the b u s i n e s s be conducted by an i n d i v i d u a l , or more t h a n one p e r s o n i n p a r t n e r s h i p , s h a l l , w i t h i n s i x t y days a f t e r commencing such b u s i n e s s , make a r e p o r t to t h e Department of Revenue, s e t t i n g f o r t h the name or names of t h e p e r s o n s engaging i n such b u s i n e s s , the name under which the b u s i n e s s i s boing conductod, i t s l o c a t i o n , and t h e amount of c a p i t a l i n v e s t e d t h e r e i n . " (Act of A p r i l 9, 1929, P. L. 343, A r t . V I I , s e c . 719 b ) . P e n a l t y f o r f a i l u r e to make above r e p o r t s to Department of Revenue. Any p r i v a t e banker who n e g l e c t s or r e f u s e s to make the r e t u r n of g r o s s r e c e i p t s op the r e p o r t r e f e r r e d to above to the Department of Revenue, " s h a l l , f o r every such n e g l e c t or r e f u s a l , be s u b j e c t to a p e n a l t y of one thousand d o l l a r s " , which s h a l l be c o l l e c t e d by 22, ^ - 93 the Department of Bevenuet XVII, s e c . 1707). X-6812 (Adt Of April 9, 1929, P. L. 343, A r t . Branches; g e n e r a l establishment of p r o h i b i t e d ; The laws of t h i s State provide t h a t "no i n d i v i d u a l , p a r t n e r s h i p , or u n i n c o r p o r a t e d a s s o c i a t i o n carrying on a banking.business s h a l l e s t a b l i s h , m a i n t a i n , or o p e r a t e , e i t h e r d i r e c t l y or i n d i r e c t l y , any branch bank, branch o f f i c e , agency, s u b - o f f i c e , sub-agency, or branch p l a c e of b u s i n e s s , w i t h i n the Commonwealth of Pennsylvania, f o r the t r a n s a c t i o n of any p a r t of * * * , h i s , or t h e i r b u s i n e s s , but a l l of the b u s in e s s of such * * *, i n d i v i d u a l s , p a r t n e r s h i p s , and unincorpor a t e d a s s o c i a t i o n s s h a l l be c a r r i e d on s o l e l y and e x c l u s i v e l y a t * * * h i s , or t h e i r p r i n c i p a l p l a c e of b u s i n e s s . " (Act of April 27, 1927, P. 1 . 400, sec. 1; Purdort's Penna. S t a t s . , T i t l e 7 , sec. 302, p . 100). • Exceptions; establishment p e r m i t t e d w i t h i n c o r p o r a t e l i m i t s of p l a c e s where n a t i o n a l banks were operating branches on March 1, 19<J7. "This a c t s h a l l not apply to * * * any i n d i v i d u a l , p a r t n e r s h i p , or u n i n c o r p o r a t e d a s s o c i a t i o n carrying on a banking business which has * * * , h i s , or t h e i r p r i n c i p a l p l a c e of business i n a c i t y , borough, or township w i t h i n the Commonwealth of Pennsylvania, i n which one or more n a t i o n a l banking a s s o c i a t i o n s , * * * was, on March 1, 1927, o p e r a t i n g one or more branch banks, branch o f f i c e s , agencies, subo f f i c e s , subagencies, or branch p l a c e s of b u s i n e s s , f o r the t r a n s a c t i o n of any p a r t of i t s b u s i n e s s ; and any such * * *, i n d i v i d u a l s , p a r t n e r s h i p s , and unincorporated a s s o c i a t i o n s may h e r e a f t e r e s t a b l i s h , s u b j e c t to the approval of the S e c r e t a r y of Banking, and t h e r e a f t e r maintain and operate branch banks, branch o f f i c e s , agencies, subo f f i c e s , subagencies, and branch p l a c e s of business f o r the t r a n s a c t i o n of any p a r t of * * *, h i s , or t h e i r b u s i n e s s , but only w i t h i n the corporate l i m i t s of the c i t y , borough, or township i n which i t s p r i n c i p a l o f f i c e i s l o c a t e d and i n which such n a t i o n a l banking a s s o c i a t i o n was, on March 1, 1927, operating one or more branch banks, branch o f f i c e s , a g e n c i e s , s u b o f f i c e s , subagencies, or branch p l a c e s of b u s i n e s s . The r i g h t to e s t a b l i s h and maintain branch banks, branch o f f i c e s , a g e n c i e s , s u b o f f i c e s , subagencies, or branch places of b u s i n e s s , under the p r o v i s i o n s of t h i s s e c t i o n , s h a l l be l i m i t e d to t h e t e r r i t o r y included w i t h i n the corporate l i m i t s on March 1, 1927, of the r e s p e c t i v e c i t i e s , boroughs, or townships i n which such n a t i o n a l banking a s s o c i a t i o n s were on t h a t date operating one or more branch banks, branch o f f i c e s , agencies, s u b o f f i c e s , subagencies, or branch p l a c e s of business as a f o r e s a i d ; and such r i g h t s h a l l not extend to a d d i t i o n a l t e r r i t o r y which may, a f t e r March 1, 1927, be added to such c i t i e s , boroughs, or townships, by annexation, c o n s o l i d a t i o n with one or more municipal c o r p o r a t i o n s or otherwise, nor s h a l l i t extend to other p o r t i o n s or d i v i s i o n s of municipal corporations to which such c i t i e s , boroughs, or townships may be annexed, or with which they may be c o n s o l i d a t e d a f t e r t h a t d a t e ; the i n t e n t i o n being to l i m i t to the r e s p e c t i v e corporate l i m i t s of such c i t i e s , boroughs, or townships a s 94 - X-6812 11 t h e y e x i s t e d on March 1, 1927, r i g h t to e s t a b l i s h and m a i n t a i n the hranch banks, "branch o f f i c e s , a g e n c i e s , s u b o f f i c e s , subagencios, and branch p l a c e s of b u s i n e s s a u t h o r i z e d i n t h i s s e c t i o n . " (Act of A p r i l 27, 1927, p . L. 400, s u e . 3; p u r d o n ' s Fenna. S t a t s . , T i t l e 7, s e c . 304, p. 102). Other e x c e p t i o n s are t h a t the a c t does not apply to branches e s t a b l i s h e d or f o r which l o c a t i o n s had been secured p r i o r to March 1 , 1927, or to branches r e s u l t i n g from c o n s o l i d a t i o n s e f f e c t i v e p r i o r t o A p r i l 1, 1927; "and such * * * i n d i v i d u a l s , p a r t n e r s h i p s , and u n i n c o r p o r a t e d a s s o c i a t i o n s s h a l l have the r i g h t to r e l o c a t e the same w i t h i n t h e c o r p o r a t e l i m i t s of the c i t y , borough, or township i n which the p r i n c i p a l p l a c e of b u s i n e s s i s l o c a t e d a t the time of such r e l o c a t i o n , s u b j e c t t o the a p p r o v a l of the S e c r e t a r y of Banking." (Act of A p r i l 27, 1927, p . L. 400, s e c . 2; Purdon's Fenna. S t a t s . , T i t l e 7, s e c . 305, p . 101 ) . S u r e t y on bonds. An " u n i n c o r p o r a t e d bank" i s p r o h i b i t e d from a c t i n g g e n e r a l l y as " s u r e t y on any bonds".. . (Act of May 16, 1923, p . L. 248, s e e s . 1 - 3 ; P u r d o n ' s Penna. S t a t s . , Ti%le 7, s e e s . 281-283, p p . 98 and 9 9 ) . P r e s e r v a t i o n of r e c o r d s . Every " p r i v a t e banker" must " p r e s e r v e , i n such form and manner t h a t t h e y may be r e a d i l y produced on p r o p e r demand, a l l * * * h i s * * * r e c o r d s of o r i g i n a l or f i n a l e n t r y , i n c l u d i n g cards used under the card system, and d e p o s i t s l i p s or t i c k e t s , f o r a p e r i o d of seven y e a r s from t h e date of making the l a s t e n t r y on the same." (Act of A p r i l 4, 1929, P . li. 141, s e c . 1; P a r d o n ' s penna. S t a t s . , T i t l e 7, s e c . 321, p . 104). A d v e r t i s i n g as t r u s t company or u s i n g word " t r u s t " as p a r t of t i t l e . The laws of t h i s s t a t e p r o h i b i t any "person, c o p a r t n e r s h i p , ( o r ) l i m i t e d c o p a r t n e r s h i p " from a d v e r t i s i n g or p u t t i n g f o r t h any s i g n as a t r u s t company or u s i n g the v/ord " t r u s t " as a p a r t of h i s or i t s name or t i t l e . A p e n a l t y i s p r e s c r i b e d f o r a v i o l a t i o n of t h i s p r o h i b i t i o n . (Adt of A p r i l 2 2 , 1909, P . L . . 1 2 1 , s e c . 2 , as amended by Act of May 19, 1923, ? , L. 274, s e c . 1; Purdon's penna. S t a t s . , T i t l e 7, s e c . 687, p . 169). Unauthorized or u n s a f e "practices or other v i o l a t i o n s of la'.?; s e c r e t a r y may i s s u e order t o d i s c o n t i n u e . Whenever i t appears to t h e s e c r e t a r y t h a t any person has v i o l a t e d any p r o v i s i o n of l a v , or i s conducting b u s i n e s s i n an u n a u t h o r i z e d or u n s a f e manner, the s e c r e t a r y may i s s u e an order d i r e c t i n g such p e r s o n to d i s c o n t i n u e such v i o l a t i o n of law or unauthorized- or u n s a f e 227 - 95 p r a c t i c e s . (Act of June 15, l 9 $ 3 , p; S t a t s . , T i t l e 7, s e c . 20, p . 2 5 ) . X-6812 809, s e c . 20; Pu.rd.on's penna. S e c r e t a r y may take p o s s e s s i o n of b u s i n e s s ; when. * "The s e c r e t a r y may, a f t e r h e a r i n g had upon n o t i c e g i v e n w i t h the approval and. consent of t h e Attorney General, take p o s s e s s i o n of the "business and. p r o p e r t y of any * * * person s u b j e c t to t h e s u p e r v i s i o n of the d e p a r t m e n t , whenever i t s h a l l appear t o him t h a t such * * * person: "1. Has v i o l a t e d any law r e g u l a t i n g * * * h i s b u s i n e s s , and has p e r s i s t e d i n such v i o l a t i o n i n d i s r e g a r d of an order d u l y made by the secretary; " I I . I s conducting b u s i n e s s i n an u n a u t h o r i z e d or u n s a f e manner and has p e r s i s t e d i n d i s r e g a r d of an order duly made by t h e s e c r e t a r y ; " I I I . I s i n an u n s a f e or unsound c o n d i t i o n to continue b u s i n e s s : P r o v i d e d , in. such c a s e , That the s e c r e t a r y may f o r t h w i t h , w i t h o u t such h e a r i n g and consent of t h e A t t o r n e y General, take p o s s e s s i o n of the b u s i n e s s and p r o p e r t y of any such * * * p e r s o n r e c e i v i n g moneys on d e p o s i t , when and i f , i n h i s opinion the p r o t e c t i o n of d e p o s i t o r s and the p u b l i c r e q u i r e s such peremptory a c t i o n ; "IV. Has an impairment of c a p i t a l , which has not been r e s t o r e d or made good w i t h i n the time f i x e d by order of t h e s e c r e t a r y ; "V. Has suspended payment of o b l i g a t i o n s ; "VI. Has n e g l e c t e d or r e f u s e d to comply w i t h the terms of any l a w f u l l y i s s u e d order of the s e c r e t a r y ; " V I I . Has r e f u s e d , upon p r o p e r demand, to submit the r e c o r d s and a f f a i r s of the b u s i n e s s to t h e s e c r e t a r y , a deputy, or any duly a u t h o r i z e d examiner or agent of t h e department; 'i " V I I I . Has r e f u s e d to be examined, upon oath or a f f i r m a t i o n , r e g a r d i n g such a f f a i r s ; "IX. I s i n the hands of a r e c e i v e r a p p o i n t e d by any c o u r t , or i n any bankruptcy p r o c e e d i n g , oy of an a s s i g n e e or t r u s t e e f o r c r e d i t o r s a p p o i n t e d by such * * * p e r s o n . "The s e c r e t a r y may, i n l i k e manner, take p o s s e s s i o n of the b u s i n e s s and p r o p e r t y of any p r i v a t e or u n i n c o r p o r a t e d bank, or t h e e s t a t e of any p r i v a t e b a n k e r , otherwise exempt from the s u p e r v i s i o n of the department, whenever such p r i v a t e or u n i n c o r p o r a t e d bank s h a l l have made an assignment f o r the b e n e f i t of c r e d i t o r s , or f o r any of the causes mentioned h e r e i n b e f o r e i n t h i s s e c t i o n . " (Act of June 15, 1923, P . I . 809, s e c . 21, as amended by Act of May 5, 1927, I V L. 762, s e c . 7; : 229 - 95 - X-6812 p u r d o n ' s penna» S t a t s . , T i t l e 7, s e c . 21, pp. 25 and 26.) C e r t i f i c a t e of taking -possession; s e c r e t a r y to gupersede r e c e i v e r previously appointed. When the s e c r e t a r y has taken possession of the business and p r o p e r t y of any p e r s o n , he mast make a c e r t i f i c a t e s e t t i n g f o r t h t h a t he has so taken p o s s e s s i o n , and mast f i l e such c e r t i f i c a t e i n h i s o f f i c e "and cause a c e r t i f i e d copy thereof to tie f i l e d i n the o f f i c e of the p r o t h o n o t a r y , * * * . " A f t e r t h e f i l i n g of such c e r t i f i e d copy, the s e c r e t a r y " s h a l l supersede any r e c e i v e r p r e v i o u s l y appointed by any court f o r , or any assignee or t r u s t e e f o r c r e d i t o r s appointed by, such * * * p e r s o n . " (Act of June 15, 1923, P. L. 809, sec. 22; Pardon's Penna. S t a t s . , T i t l e 7, s e c . 22, pp. 27 and 2 8 ) . S e c r e t a r y may be e n j o i n e d from continuing p o s s e s s i o n . At any time w i t h i n ten days a f t e r the s e c r e t a r y takes p o s s e s s i o n of any person, such person may apply to the court f o r an i n j u n c t i o n to r e s t r a i n the s e c r e t a r y from continuing such p o s s e s s i o n . I f i t appears from s a t i s f a c t o r y evidence that t h e r e i s j u s t cause f o r the t a k i n g and continuing of p o s s e s s i o n , the s e c r e t a r y s h a l l not be e n j o i n e d ; b u t i f t h i s evidence can.be overcome by proper proof produced by the p e r s o n , "the court s h a l l d i r e c t the s e c r e t a r y to r e f r a i n from f u r t h e r proceedings and to s u r r e n d e r such p o s s e s s i o n . " (Act of June 15, 1923, p . 1 . 809, s e c . 23, as amended by Act of May 5, 1927, p . L- 762, s e c . 8; P a r d o n ' s penna. S t a t s . , T i t l e 7, s e c . 23, p . 2 8 ) . Notice of taking p o s s e s s i o n to p a r t i e s holding a s s e t s ; e f f e c t on l i e n s , e t c . The s e c r e t a r y mast give n o t i c e i n w r i t i n g to a l l p a r t i e s holding a s s e t s of the f a c t t h a t he has taken possession of the p r o p e r t y and business of a p e r s o n . "ITo one having such n o t i c e or a c t u a l knowledge t h a t the s e c r e t a r y has so taken p o s s e s s i o n s h a l l have a l i e n or charge a g a i n s t any of the a s s e t s of puch * * * person f o r any charge, payment, advance, or clearance t h e r e a f t e r made or l i a b i l i t y t h e r e a f t e r i n c u r r e d . " The s t a t u s of a l l p a r t i e s becomes f i x e d on the date, the s e c r e t a r y f i l e s the c e r t i f i c a t e of p o s s e s s i o n i n h i s o f f i c e . (Act of June 15, 1923, P . L. 809, s e c . 25, a s amended by Act of May 5, 1927, P. L. 762, s e c . 9; P a r don's Penna. S t a t s . , T i t l e 7, s e c . 25, p . 2 9 ) . Inventory of a s s e t s . The S e c r e t a r y mast make a complete inventory of the a s s e t s of any p e r s o n , whose p r o p e r t y and business he has taken over, (Act of June 15, 1923, p . L. 809, s e c . 26; pardon's Penna. S t a t s . , T i t l e 7, s e c . 26, p . 3 0 ) . S e c r e t a r y may suspend or continue b u s i n e s s . The s e c r e t a r y i s a u t h o r i z e d , upon taking possession of t h e p r o p e r t y and business of any person, " t o continue or suspend the b u s i n e s s f o r such - 9? - X-6812 2 3 0 ''period, as he may deem necessary t o enable Mm to determine whether to l i q u i d a t e the a f f a i r s of such * * * person* and, during such p e r i o d , t o "take such a c t i d n as i n hid judgment i s n e c e s s a r y to conserve the a s s e t s and "business» 11 (Act of June 15, 1923, P. L. 809, s e c . 27; Pardon's Penna. S t a t s . , T i t l e 7, s e c . 27, p . 3 0 ) . S u r r e n d e r of p o s s e s s i o n by s e c r e t a r y . The s e c r e t a r y may, upon c o n d i t i o n s approved by him, s u r r e n d e r poss e s s i o n of the b u s i n e s s of any person for t h e purpose of p e r m i t t i n g such p e r s o n t o resume b u s i n e s s , to s e l l or convey h i s p r o p e r t y and f r a n c h i s e , or t o merge or c o n s o l i d a t e h i s b u s i n e s s with t h a t of another p e r s o n , or because he i s w i t h o u t funds to continue or l i q u i d a t e the b u s i n e s s and p r o p e r t y of such p e r s o n . When p o s s e s s i o n i s so s u r r e n d e r e d , the s e c r e t a r y must i s s u e an order t o t h a t e f f e c t , which order must be f i l e d i n h i s o f f i c e . A c e r t i f i e d copy of the order must a l s o be f i l e d i n the o f f i c e of the p r o t h o n o t a r y . (Act of June 15, 1923, P . L . 809, s e c . 28, as amended by Act of May 5 , 1927, P.L. 762, s e c . 10; P a r d o n ' s penna. S t a t s . , T i t l e 7, s e c . 2 8 , p . 3 0 ) . Powers of s e c r e t a r y as r e c e i v e r . When t h e s e c r e t a r y takes p o s s e s s i o n of the business and p r o p e r t y of any p e r s o n , he has the same r i g h t s , powers and d u t i e s as a r e c e i v e r a p p o i n t e d by any c o u r t of e q u i t y i n the S t a t e of P e n n s y l v a n i a . (Act of June 15, 1923, p . L . 809, s e c . 29, as amended bjf Act of May 5, 1927, P . I . 762, s e c . 11; P a r d o n ' s Penna. S t a t s . , T i t l e 7, s e c . 29, p . 2 0 ) . Secretary to continue possession u n t i l a f f a i r s are liquidated; exceptions. When the s e c r e t a r y has taken p o s s e s s i o n of the b u s i n e s s and p r o p e r t y of any p e r s o n , he s h a l l hold such p o s s e s s i o n u n t i l the a f f a i r s of such person have been l i q u i d a t e d by him, u n l e s s ( l ) he i s d i r e c t e d by the court t o s u r r e n d e r such p o s s e s s i o n , (2) he has p e r m i t t e d a resumption of b u s i n e s s , or a s a l e or conveyance of p r o p e r t y and f r a n c h i s e s , or a merger or cons o l i d a t i o n , or (3) the d e p o s i t o r s and other c r e d i t o r s of such person and the expenses of such l i q u i d a t i o n have been p a i d i n f u l l . (Act of June 15, 1923, P . L . 809, s e c . 31; Purdon's Penna. S t a t s . , T i t l e 7, s e c . 31, p . 3 2 ) . liquidation. The laws of t h i s S t a t e a l s o c o n t a i n d e t a i l e d p r o v i s i o n s with r e f erence t o the l i q u i d a t i o n of persons and the d u t i e s and powers of the Secr e t a r y of Banking i n qormection t h e r e w i t h . These p r o v i s i o n s d e a l with the duty of the s e c r e t a r y to make an i n v e n t o r y and appraisement of a s s e t s of the p e r s o n , the d i s p o s i t i o n of a l l f u n d s , p r o p e r t y and investments h e l d by the person i n a f i d u c i a r y c a p a c i t y , the n o t i c e the s e c r e t a r y must give to d e p o s i t o r s and c r e d i t o r s , the proof of claims by d e p o s i t o r s and c r e d i t o r s , the allowance of such claims, the f i l i n g by the s e c r e t a r y of a p a r t i a l or f i n a l statement of r e c e i p t s and expenditures and a l i s t of claims allowed or r e j e c t e d , the d i s t r i b u t i o n of dividends to approved c l a i m a n t s , the h e a r i n g and d e c i s i o n of c o n t r o v e r t e d claims,and the payment of l i q u i d a t i o n expenses. (Act Of June 15, 1923, p . L. 809, s e e s . 40, 41,43,45 and 49, and s e e s . 38, 4 2 , 4 4 , 4 6 , 4 7 , and 48, as amended by Act of May 5, 1927, P.L. 762, s e e s . 1722; P a r d o n ' s Penna. S t a t s . , T i t l e 7, s e e s . 38,40-49, pp. 3 7 - 4 6 ) . — 98 -» X-6812 ? 231 igoqq.iSkm, P r i v a t e "banking b u s i n e s s a p p a r e n t l y -prohibited. The f o l l o w i n g p r o v i s i o n s would, seem to p r o h i b i t a "person, p a r t n e r s h i p or a s s o c i a t i o n " from t r a n s a c t i n g a g e n e r a l banking b u s i n e s s . "Ho c o r p o r a t i o n , e i t h e r domestic or f o r e i g n , and no p e r s o n , p a r t n e r s h i p , or a s s o c i a t i o n , except banks, savings bank, or t r u s t companies i n c o r p o r a t e d under t h e laws of t h i s s t a t e " s h a l l h e r e a f t e r make u s e of any s i g n or o t h e r a d v e r t i s i n g i n d i c a t i n g t h a t the p l a c e of b u s i n e s s or the b u s i n e s s c a r r i e d on i s t h a t of a "bank, savings bank, or t r u s t company; jior s h a l l any such c o r p o r a t i o n , p e r s o n , a s s o c i a t i o n , or p a r t n e r s h i p r e c e i v e d e p o s i t s and t r a n s a c t b u s i n e s s i n the way or manner of a bank, s a v ings bank, or t r u s t company, o r i n such a way or manner a s to l e a d the p u b l i c t o b e l i e v e , or a s , i n the opinion of t h e bank commissioner, might l e a d t h e p u b l i c to b e l i e v e , t h a t i t s b u s i n e s s i s t h a t of a bank, s a v i n g s bank, or t r u s t company; * * (P.I,. 1909, ch. 404, s e c . 24; Banking Laws, 1929, s e c . 24, p . 7 1 . ) Examination by bank commissioner t o a s c e r t a i n whether law i s being v i o l a t e d . The bank commissioner and h i s a s s i s t a n t s have a u t h o r i t y " t o examine the a c c o u n t s , books, and papers of any corporation* p e r s o n , p a r t n e r s h i p , or a s s o c i a t i o n which makes a b u s i n e s s of r e c e i v i n g money on d e p o s i t , i n order to a s c e r t a i n whether such c o r p o r a t i o n , p e r s o n , p a r t n e r s h i p , or a s s o c i a t i o n has v i o l a t e d o r i s v i o l a t i n g any p r o v i s i o n of t h i s t i t l e ; * * * " . ( P . L . 1909, ch. 404, s e c . 25; Banking Laws, 1929, s e c . 2 5 . p p . 71 and 7 2 . ) P e n a l t y f o r v i o l a t i o n ; banking commissioner must r e p o r t v i o l a t i o n to Attorney General; procedure to r e s t r a i n f u r t h e r v i o l a t i o n . Any p e r s o n , p a r t n e r s h i p , or a s s o c i a t i o n v i o l a t i n g any p r o v i s i o n of the s e c t i o n f i r s t above quoted must pay a p e n a l t y of one hundred d o l l a r s a day f o r every day d u r i n g which such v i o l a t i o n c o n t i n u e s , and a l l such V i o l a t i o n s must be immediately r e p o r t e d by the bank commissioner to the A t t o r n e y General. The p e n a l t y may be r e c o v e r e d by an i n f o r m a t i o n or o t h e r a p p r o p r i a t e p r o c e e d i n g brought i n the Superior Court f o r the County i n which s a i d v i o l a t i o n has o c c u r r e d , i n t h e name of the Attorney General. Upon such i n f o r m a t i o n or o t h e r p r o c e e d i n g the c o u r t may i s s u e an i n j u n c t i o n r e s t r a i n i n g such p e r s o n , p a r t n e r s h i p , or a s s o c i a t i o n from f u r t h e r p r o s e c u t i o n of i t s b u s i n e s s and may make such o t h e r o r d e r o r decree a s may be p r o p e r . ( P . L . 1909, ch. 404, s e c . 25; Banking Laws, 1929, s e c . 25, p . 7 2 . ) ' SOUTH CAROL I M . , P r i v a t e bftnks not •prohibited; a p p a r e n t l y s u b j e c t to examination; o p e r a t i o n s a l s o - s u b j e c t to o t h e r p r o v i s i o n s of law. • I t does not appear t h a t the laws of t h i s S t a t e p r o h i b i t p r i v a t e •* 9-9 — X-6812 banks from t r a n s a c t i n g k "banking b u s i n e s s ; /but i t does appear from c e r t a i n p r o v i s i o n s of these laws t h a t %anks a r e __ s u b j e c t to examination "by the S t a t e Bank Examiner, a r e e x p r e s s l y r e q u i r e d to p u b l i s h r e p o r t s of c o n d i t i o n , a r e made s u b j e c t to the general p r o v i s i o n s covering t h e t a x a t i o n of "banks, and a r e expressly i n h i b i t e d from u s i n g the words "bank", "banking", " t r u s t " , or " t r u s t company" i n connection with t h e i r b u s i n e s s , or from making use of any a d v e r t i s i n g or t r a n s a c t i n g b u s i n e s s i n any manner so a s to c r e a t e the b e l i e f t h a t the b u s i n e s s engaged i n i s t h a t pf a t r u s t company. These p r o v i s i o n s a r e r e f e r r e d to below. Banking i n s t i t u t i o n s conducted by "persons" s u b j e c t to examination by S t a t e Examiner^ The Governor of the S t a t e of South Carolina i s r e q u i r e d to "app o i n t a competent person to examine, from time to time, a s h e r e i n a f t e r provided, i n t o the a f f a i r s and the c o n d i t i o n of a l l banks and banking i n s t i t u t i o n s conducted by c o r p o r a t i o n s or persons i n t h i s S t a t e . " (Code of 1923, s e c . 3977; Banking Law Panphlet, 1928, s e c . 82, p . 4 3 . ) Apparently, t h i s p r o v i s i o n makes p r i v a t e banks s u b j e c t to examination by the S t a t e examiner "as h e r e i n a f t e r provided"; but because some of the se " h e r e i n a f t e r provided" examination p r o v i s i o n s can not be made t o apply to p r i v a t e bankers, i t would seem t h a t i t was intended t h a t such p r o v i s i o n s should apply to p r i v a t e banks wherever i t i s p o s s i b l e to make them a p p l i c a b l e and these a p p l i c a b l e p r o v i s i o n s a r e s e t out beldw. Duty and power of examiner: r e p o r t of examination. " I t s h a l l be the duty of such Bank Examiner, and he s h a l l have power to make a thorough examination into a l l t h e books, papers and a f f a i r s of the a f o r e s a i d banks and banking i n s t i t u t i o n s , and i n making such examinat i o n s the Examiner s h a l l have a u t h o r i t y to a d m i n i s t e r oaths and to sunmon and examine any and a l l persons connected with the s a i d banks and banking i n s t i t u t i o n s , and i f any person in such examination b e f o r e the Bank Examiner s h a l l t e s t i f y f a l s e l y , he s h a l l b % i n d i c t a b l e as f o r p e r j u r y . The Bank Examiner s h a l l make a f u l l and d e t a i l e d r e p o r t of h i s f i n d i n g s and f i l e the same i n t h e o f f i c e of the S t a t e Treasurer, and i n t h i s r e p o r t s h a l l be s e t f o r t h a l l v i o l a t i o n s , i f any, of the banking laws of the S t a t e , and a l s o such a f u l l summary of the a f f a i r s of the bank as s h a l l be necessary f o r the p r o t e c t i o n of the r i g h t s of the stockholders, d e p o s i t o r s and c r e d i t o r s of such bank. I t s h a l l a l s o be the duty of s a i d Bank Examiner to f o r t h w i t h bring to the a t t e n t i o n of the said banks a l l such v i o l a t i o n s of the banking laws of t h i s S t a t e and t h a t the same be remedied or d i s c o n t i n u e d . He s h a l l f u r n i s h a l l banks so examined by him or h i s a s s i s t a n t s with a copy of s a i d r e p o r t . (Code of 19$2, sec. 3978; Banking Law Pamphlet, 1928, sec. 83, p . 4 . ) Number of examinations r e q u i r e d : f e e s . "The Bank Examiner s h a l l make,at l e a s t two examinations every year of a l l the banks and banking i n s t i t u t i o n s in t h i s S t a t e * * * . " Fees f o r these examinations are to be charged according to the c a p i t a l - 100 - X-6812 333 of the "banks. No bank cati be reqiiifrBd to pay f o r more than two examinat i o n s each y e a r , u n l e s s a d d i t i o n a l examinations a r e necessary "because of the misoanagement or negligence of a bank's o f f i c e r s i n which cases the a c t u a l expenses of such a d d i t i o n a l examinations must be p a i d by the bank examined. The S t a t e Treasurer must hold these f e e s f o r paying the expenses of the S t a t e Examiner and. they a r e payable upon the order of the S t a t e Bank Examiner, The S t a t e Treasurer mast include i n h i s annual r e p o r t to the L e g i s l a t u r e an a b s t r a c t of the r e p o r t s made to him by the S t a t e Bank Examiner, showing the f i n a n c i a l c ondition of the banks examined by him, and a l s o a schedule of the r e c e i p t s and disbursements connected with the S t a t e Bank Examiner*s o f f i c e . (Code of 1922, s e c . 3983, as a mended by Acts of 1923, p . 191; Banking Law Pamphlet, 1928, s e c . 85, p . 44). Examiner may take charge of unsound bank and apply f o r appointment of receiver. " I f the S t a t e Bank Examiner s h a l l f i n d t h a t any of the s a i d banks or banking i n s t i t u t i o n s a r e i n s o l v e n t , or that t h e i r business i s being so d i s h o n e s t l y and f r a u d u l e n t l y conducted as to j e o p a r d i z e the i n t e r e s t s of the d e p o s i t o r s , c r e d i t o r s or stockholders, - he shall have f u l l power, upon c o n s u l t a t i o n with the S t a t e Treasurer, to take and r e t a i n p o s s e s s i o n of a l l the a s s e t s and p r o p e r t y of every d e s c r i p t i o n belonging to such bank o r banking i n s t i t u t i o n : Provided, He s h a l l have f i r s t a p p l i e d f o r and obtained an o r d e r to t h i s e f f e c t from a C i r c u i t Judge, e i t h e r r e s i d i n g or p r e s i d i n g a t the time, i n t h e C i r c u i t i n which such bank or banking i n s t i t u t i o n i s l o c a t e d , two days' n o t i c e of such a p p l i c a t i o n being f i r s t given tb the Board of D i r e c t o r s of s a i d batik of the a p p l i c a t i o n f o r s a i d o r d e r . And i t s h a l l be h i s duty, and he i s hereby a u t h o r i z e d and empowered, to make proper a p p l i c a t i o n to the court f o r the appointment of himself or some other person a s r e c e i v e r t o wind up and s e t t l e the a f f a i r s of such bank or banking i n s t i t u t i o n . " (Code of 1922, s e c . 3985; Banking Law Pamphlet, 1928, s e c . 87, p . 4 6 ) . Reports of c o n d i t i o n and b u s i n e s s must be published: p e n a l t y f o r f a i l u r e to publish. "All i n s t i t u t i o n s doing business i n t h i s S t a t e i n l e n d i n g money and r e c e i v i n g d e p o s i t s , under Acts of i n c o r p o r a t i o n granted by the S t a t e , a r e hereby r e q u i r e d , under p e n a l t y of a f o r f e i t u r e of t h e i r c h a r t e r s , to p u b l i s h in a newspaper i n the c i t y , town or v i l l a g e where they, or any branch t h e r e o f , may do business, when and a s c a l l e d f o r by the S t a t e Bank Examiner, without p r e v i o u s n o t i c e , a c o r r e c t r e p o r t of the c o n d i t i o n and business of such i n s t i t u t i o n , which r e p o r t Shall contain a statement, under oath, by the P r e s i d e n t or Cashier of such i n s t i t u t i o n , of the amount of the c a p i t a l stock p a i d i n , d e p o s i t s , discounts, p r o p e r t y and l i a b i l i t i e s of said i n s t i t u t i o n , v e r i f i e d by t h r e e of the d i r e c t o r s t h e r e o f . "Upon failure* of any such i n s t i t u t i o n to p u b l i s h the r e p o r t r e q u i r e d h e r e i n , t h e Attorney General* on n o t i c e t h e r e o f , s h a l l a t once take t h e n e c e s s a r y s t e p s t o vacate the c h a r t e r of s a i d i n s t i t u t i o n * This s e c t i o n s h a l l apply to a l l p r i v a t e banking I n s t i t u t i o n s , whether c h a r t e r e d or not*" (Code of 1922, sec« 2Bf}Qj Bankii^ Law Pamphlet, 1928, s e c . 60, p . 28 -> \ \ /• '' ' / • ••••• . X-6812 - 101 » Taxation. The laws e x p r e s s l y make p r i v a t e "banks s u b j e c t t o t h e p r o v i s i o n s covering t h e t a x a t i o n of t h e s h a r e s of s t o c k and r e a l e s t a t e of "banks, and c o n t a i n d e t a i l e d r e q u i r e m e n t s w i t h r e f e r e n c e to t h e manner of imposi n g such t a x a t i o n . (Code of 1922, s e c . 342, a s amended "by Laws of 1924, p . 1220, s e c . 366, s e c . 400-403; s e c . 404, as amended "by Laws of 1927, p . 265, s e c . 405-412, and A c t s approved March 21, 1934, p . 116, Acts of 1924, and A p r i l 14, 1925, p . 294, Laws of 1925; Banking Law Pamphlet, 1928, s e e s . 92-108, p p . 4 9 - 5 5 . ) Taxation of p r i v a t e banking i n s t i t u t i o n s i s a l s o provided f o r by Chapter 194, Acts of 1925, p . 294. Use of words "Bank" or "Banking". " I t s h a l l be u n l a w f u l f o r any p e r s o n or p e r s o n s i n t h i s S t a t e to u s e t h e words 'Bank' or 'Banking 1 i n connection w i t h any b u s i n e s s , c a l l i n g or p u r s u i t , o t h e r t h a n a l e g a l i z e d i n c o r p o r a t e d banking i n s t i t u t i o n . Any p e r s o n or persons v i o l a t i n g the p r o v i s i o n s of t h i s Act s h a l l be s u b j e c t t o a f i n e of not l e s s than one thousand ($1,000.00) d o l l a r s and not more t h a n t e n thousand ($10,000.00) d o l l a r s and by imprisonment not exceeding t e n y e a r s , nor l e s s t h a n one y e a r , i n t h e d i s c r e t i o n of t h e c o u r t . " (Criminal Code of 1922, s e c . 235; Banking Law Pamphlet, 1928, sec 145, p . 109). Use of words " t r u s t " or " t r u s t company", or t r a n s a c t i o n of b u s i n e s s as t r u s t company. No p e r s o n , a s s o c i a t i o n or f i r m " o t h e r t h a n t r u s t companies c h a r t e r e d under t h e laws of t h e S t a t e of South C a r o l i n a p r i o r t o t h e passage and approval of t h i s A c t , or o t h e r than a c o r p o r a t i o n a u t h o r i z e d t o do b u s i n e s s of a t r u s t company and s u b j e c t to t h e s u p e r v i s i o n of t h e S t a t e Bank Examiner, s h a l l make u s e of t h e words ' t r u s t 1 or ' t r u s t company1 as p a r t of any a r t i f i c i a l or c o r p o r a t e name or title', 11 nor make u s e of any a d v e r t i s i n g i n d i c a t i n g t h a t t h e b u s i n e s s conducted i s t h a t of a t r u s t company," nor t r a n s a c t b u s i n e s s i n such way or manner as t o l e a d t h e p u b l i t o b e l i e v e or a s i n t h e opinion of t h e bank examiner might l e a d t h e p u b l i c t o b e l i e v e , t h a t h i s or i t s b u s i n e s s i s t h a t of a t r u s t company." A pena l t y i s p r e s c r i b e d f o r a v i o l a t i o n of t h e s e p r o v i s i o n s . (Acts of 1928, ch. 693, s e c . 24, p . 1283; Banking Law Pamphlet, 1928, s e c . 24, p . 126). Bank examiner may examine books, e t c . . i n case of v i o l a t i o n of above provisions. "The bank examiner s h a l l have a u t h o r i t y to examine t h e a c c o u n t s , books and p a p e r s of any p e r s o n , a s s o c i a t i o n , f i r m or c o r p o r a t i o n whom he has r e a s o n t o s u s p e c t i s v i o l a t i n g the p r o v i s i o n s of t h i s (above) s e c t i o n and t o summon and examine under o a t h , which he i s empowered t o a d m i n i s t e r , any p e r s o n whom he may have r e a s o n t o b e l i e v e has v i o l a t e d or i s a p a r t i c i pant i n any v i o l a t i o n of t h e p r o v i s i o n s of t h i s s e c t i o n . " (Acts of 1928, ch. 693, s e c . 24, p . 1283; Banking Law Pamphlet, 1928, s e c . 24, p . 126). - 102 — X-68lj3 285 SOUTH DAKOTA.. P r i v a t e banking "business permitted, "but -provisions of "bank a c t made applicable. I t appears from the following p r o v i s i o n s t h a t a p r i v a t e "banking "business i s not p r o h i b i t e d , but t h a t where such business i s engaged i n i t i s s u b j e c t to the sane general p r o v i s i o n s as a r e made app l i c a b l e to i n c o r p o r a t e d banks and t r u s t companies by the bank a c t . "For the purpose of t h i s chapter every corporation, a s s o c i a t i o n , f i r m CHT i n d i v i d u a l i n t h i s s t a t e whose b u s i n e s s , i n whole or i n p a r t , c o n s i s t s i n t h e t a k i n g of d e p o s i t s or buying and s e l l i n g exchange s h a l l be h e l d to be a bank, and as thus d e f i n e d each i n d i v i d u a l s t o c k holder or member of such c o r p o r a t i o n , a s s o c i a t i o n or f i r m , except as to n a t i o n a l banks, s h a l l be s u b j e c t to the p r o v i s i o n s of t h i s c h a p t e r " . "This c h a p t e r " covers the o r g a n i z a t i o n and o p e r a t i o n of banking i n s t i t u t i o n s . "Where r e f e r e n c e i n t h i s chapter i s made to banks, t r u s t companies or the b u s i n e s s of banks or t r u s t companies i n any manner, t h e same s h a l l be construed a s a p p l y i n g to any such corporation, a s s o c i a t i o n , f i r m or i n d i v i d u a l so engaged i n b u s i n e s s as d e f i n e d in t h i s s e c t i o n , * * * " . (South Dakota Revised Code of 1919, sec. 8948; Banking Laws, 1927, s e c . 11 8948, p . 1 5 ) . * * * no c h a r t e r or a u t h o r i t y to engage i n the banking business i n t h i s s t a t e s h a l l be issued and no i n d i v i d u a l , c o - p a r t n e r s h i p or c o r p o r a t i o n s h a l l be p e r m i t t e d to engage i n the banking business except on C e r t i f i c a t e i s s u e d by the Superintendent of banks upon approval of the d e p o s i t o r s ' guaranty f u n d commission." (South Dakota Revised Code of 1919, sec. 8949; Banking Laws 1927, s e c . 8949, p . 15). " I t s h a l l be unlawful f o r any person to a d v e r t i s e , p u b l i s h or otherwise r e p r e s e n t t h a t he i s engaged i n the banking business, without f i r s t having obtained a u t h o r i t y from t h e superintendent of banks as provided i n t h i s c h a p t e r " , and a p e n a l t y i s p r e s c r i b e d f o r unauthorized banking. (South Dakota Rev i s e d Code of 1919, s e c . 9000; Banking Laws, 1927, s e c . 9000, p . 3 3 ) , 3MBSSSE, Barking b u s in es s may now only be t r a n s a c t e d by c o r p o r a t i o n s . . The following p r o v i s i o n s of the laws of t h i s State would seem to r e s t r i c t the r i g h t to o b t a i n the r e q u i s i t e c e r t i f i c a t e to.do a banking business, a f t e r the passage of the s o - c a l l e d banking act of 1913, ft> a " c o r p o r a t i o n , f i r m or i n d i v i d u a l " which or who has complied with "the ; p r o v i s i o n s of the law r e g u l a t i n g the i n c o r p o r a t i o n of banking -corporations" . "Before any c o r p o r a t i o n , f i r m or i n d i v i d u a l s h a l l open o r com* mence the t r a n s a c t i o n of b u s i n e s s as a "bank in t h i s State, a f t e r the passage of t h i s (1913) Act, i t s h a l l f i r s t submit i t s a f f a i r s to an examination by the Superintendent of Banks, who s h a l l a s c e r t a i n whether the p r o v i s i o n s of the law r e g u l a t i n g the i n c o r p o r a t i o n of banking corpora X-6812 236 a t ions havd beeh complied w i t h , and whether t h e f u l l amount of t h e c a p i t a l stock with which i t proposes to commence doing "business has been paid i n . I f he s h a l l f i n d t h e s e t h i n g s t o have been p r o p e r l y done, he s h a l l then i s s u e a c e r t i f i c a t e to the said c o r p o r a t i o n , f i r m or i n d i v i d u a l banker, a u t h o r i z i n g them t o operate and c a r r y on a b u s i n e s s of • banking." ( P u b l i c Acts of 1913, ch. 20, s e c . 24; Banking Law Pamphlet, with amendments t o and i n c l u d i n g 1923, sec. 24, p . 22.) "The p r o v i s i o n s of t h i s Act s h a l l apply to a l l persons and corporations c a r r y i n g on a banking business i n t h i s S t a t e , except t h a t the p r o v i s i o n s of t h i s Act s h a l l not apply to n a t i o n a l banks". (Public Acts of 1913, ch. 20, s e c . 42; Banking Law Pamphlet , with amendments t o and including 1923, s e c . 42, p. 27.) "The term or word ' b a n k ' , or ' b a n k s ' , or ' b a n k e r ' , as used i n t h i s Act, wherever i t may occur i n any p a r t t h e r e o f , s h a l l s i g n i f y , mean, cover and i n c l u d e every t r u s t company, loan company, mortgage s e c u r i t y company, s a f e d e p o s i t company, r e c e i v i n g money on d e p o s i t , and every i n d i v i d u a l , f i r m , c o r p o r a t i o n , a s s o c i a t i o n or company doing a banking, loan or discount b u s i n e s s and r e c e i v i n g money on deposit a.nd performing f u n c t i o n s of a bank". (Public Acts of 1913, ch. 20, s e c . 44; Banking Law Pamphlet, w i t h amendments t o and i n c l u d i n g 1923, s e c . 44, p . 28). The bank a c t a l s o contains numerous r e f e r e n c e s t o t h e words "persons", " f i r m s " and " i n d i v i d u a l s " , and, i n some few i n s t a n c e s , the term " p r i v a t e banker" i s used; f u r t h e r m o r e , the a c t , i n c e r t a i n s e c t i o n s thereof ( s e c . 10, paragraphs 5 and 15, and sec. 15, paragraph 1 ) , spec i f i c a l l y d i s t i n g u i s h e s between "corporations" and "persons" or "firms" engaged i n the banking b u s i n e s s i n o u t l i n i n g t h e procedure to be followed i n complying w i t h the requirements of the r e s p e c t i v e s e c t i o n s , i n d i c a t i n g t h a t a p r i v a t e banking b u s i n e s s i s a c t u a l l y recognized i n t h i s S t a t e . In view of t h e p r o v i s i o n s above quoted, however, i t would seem t h a t i t was intended t h a t t h i s r e c o g n i t i o n should apply only to p r i v a t e bankers who were t r a n s a c t i n g a banking b u s i n e s s p r i o r t o t h e passage of t h e 1913 bank a c t , although no such exception i s expressly made i n the a c t i t s e l f . TEXAS. P r i v a t e banking b u s i n e s s p e r m i t t e d , but sub.ject t o c e r t a i n p r o v i s i o n s of law. " I t i s hereby declared to be the p u b l i c p o l i c y of t h i s S t a t e t h a t no a d d i t i o n a l p r i v a t e banking i n s t i t u t i o n or business s h a l l be organized or e s t a b l i s h e d , a f t e r the t a k i n g e f f e c t of t h i s Act, and i t i s hereby declared t h a t i t s h a l l be unlawful f o r any p e r s o n , a s s o c i a t i o n or persons, p a r t n e r s h i p s , or t r u s t e e or t r u s t e e s a c t i n g under any common law d e c l a r a t i o n of t r u s t , to h e r e a f t e r organize or e s t a b l i s h , begin or resume t h e operation of any banking i n s t i t u t i o n or business w i t h i n t h i s S t a t e " , except as provided h e r e i n a f t e r . (Laws of 1923, ch. 185, s e c . 1 , X-6812 - 104 - a s ? p . 422; Rev t S t a t e . , 1929, Art) 541.) " I t s h a l l be the duty of p r i v a t e i n d i v i d u a l s ok* f i r m s engaging i n the banking "business .to use a f t e r the name under which t h e b u s i n e s s i s conducted, the word i n p a r e n t h e s i s •Unincorporated', and f a i l u r e t o do so s h a l l s u b j e c t the o f f e n d e r to a p e n a l t y of one hundred d o l l a r s * * *". (Acts of 1905, S . S . , p . 11; Rev. S t a t s . , 1925, a r t . 541.) Advertising. I t i s u n l a w f u l f o r any p r i v a t e banker "to u s e , a d v e r t i s e or put f o r t h any s i g n as a bank, t r u s t company, bank and t r u s t company or savings bank, or to i n any way s o l i c i t or r e c e i v e b u s i n e s s as such, or t o use as t h e i r name or p a r t of t h e i r name on any s i g n , a d v e r t i s i n g or l e t t e r head or envelope t h e word bank, banker, banking, banking company, t r u s t , t r u s t company, bank and t r u s t company, savings bank, savings, or any other term which may or might be confused with the name of a c o r p o r a t i o n organized under the g e n e r a l p r o v i s i o n s of the banking laws of t h i s S t a t e . " (Acts of 1925, ch. 148, p . 356; Rev. S t a t s . , 1925, a r t . 541-A.) Names of persons only can be used i n name. I t i s unlawful f o r a p r i v a t e bank to adopt or use any a r t i f i c i a l name or bu s i n e s s t i t l e or to use any other than t h e name of t h e p e r son or persons of t h e p r i v a t e bank, i n t h e management, conduct or o p e r a t i o n of such p r i v a t e bank. (Acts of 1925, ch. 148, p . 356; Rev. S t a t s . , 1925, a r t . 541-B.) Funds not to be employed i n s p e c u l a t i v e v e n t u r e s . No p r i v a t e bank "engaged i n the b u s i n e s s of banking or o p e r a t i n g a bank of d e p o s i t i n t h i s S t a t e s h a l l employ any p a r t of t h e funds of the d e p o s i t o r s of such i n s t i t u t i o n i n any s p e c u l a t i v e v e n t u r e or e n t e r p r i s e owned or promoted by said bank or any of t h e p a r t n e r s , . o f f i c e r s or managers t h e r e o f . " (Acts of 1923, ch. 185, sec. 3, p. 423; Penal Code, j.925, a r t . 560.) A f f i d a v i t of solvency r e q u i r e d . Not l a t e r than January 15th of each y e a r , each p r i v a t e bank i s r e q u i r e d t o f i l e w i t h the county c l e r k of the county i n which the p r i n c i p a l p l a c e of b u s i n e s s of the bank i s conducted, an a f f i d a v i t s t a t i n g t h a t t h e bank i s solvent and has and owns p r o p e r t y and a s s e t s i n t h e S t a t e of Texas the value of s h i c h i s i n excess of any and a l l of the l i a b i l i t i e s of such p r i v a t e bank. (Acts of 1923, ch. 185, sec. 4, p . 423; Penal Code, 1925, a r t . 561.) Statement of ownership r e q u i r e d ; p u b l i c a t i o n o f . Not l a t e r than January 20th of each y e a r , each p r i v a t e bank i s r e q u i r e d to f i l e w i t h the county c l e r k of the county i n which i t s p r i n c i p a l p l a c e of b u s i n e s s i s l o c a t e d , a w r i t t e n sworn statement g i v i n g t h e names of each person holding or owning any f i n a n c i a l i n t e r e s t i n t h e bank, and a copy of such statement must be published "in some newspaper of general c i r c u l a t i o n i n s a i d county, i f such newspaper be published w i t h i n s a i d county." (Acts of 1923, ch. 185, sec. 5, p . 423; Penal Code, 1925, a r t . 562.) X-6812 R e s t r i c t i o n oh advertisement of r e s p o n s i b i l i t y . No p r i v a t e bank can a d v e r t i s e i n any manner t h a t i t owns, p o s s e s s e s or has a f i n a n c i a l r e s p o n s i b i l i t y i n excess of t h e r e a l and t r u e f i n a n c i a l r e s p o n s i b i l i t y of such bank. The laws d e f i n e t h e term " f i n a n c i a l r e s p o n s i b i l i t y " t o mean money or r e a l or p e r s o n a l p r o p e r t y w i t h i n t h e S t a t e . (Acts of 1923, ch. 185, s e c . 8, p . 424; Penal Code, 1925, a r t . 5 6 3 . ) V i o l a t i o n of p r e c e d i n g p r o v i s i o n s ; p e n a l t y . A v i o l a t i o n of any of t h e p r e c e d i n g p r o v i s i o n s by any p r i v a t e bank or any member t h e r e o f c o n s t i t u t e s a misdemeanor " p u n i s h a b l e by a f i n e of not l e s s t h a n one hundred nor more t h a n one thousand d o l l a r s , or by imprisonment i n j a i l f o r not l e s s t h a n t h i r t y days nor more t h a n twelve months, or by b o t h such f i n e and imprisonment. Each day s a i d b u s i n e s s id c a r r i e d on or attempted t o be c a r r i e d on s h a l l be a s e p a r a t e o f f e n s e . " (Acts of 1923, ch. 185, s e c . 8, p . 424; Penal Code, 1925, a r t . 564.) Receiving d e p o s i t s w h i l e i n s o l v e n t ; p e n a l t y . Any p r i v a t e b a n k e r , or any manager, c a s h i e r or o t h e r p e r s o n , owning or o p e r a t i n g a p r i v a t e bank, who r e c e i v e s or a s s e n t s t o t h e r e c e p t i o n of any d e p o s i t of money or o t h e r v a l u a b l e t h i n g i n t o t h e bank, or i f such p r i v a t e bank, manager, c a s h i e r or o t h e r p e r s o n , c r e a t e s or a s s e n t s t o t h e c r e a t i o n of any d e b t , d e b t s or i n d e b t e d n e s s , i n c o n s i d e r a t i o n or by r e a s o n of which i n d e b t e d n e s s , any money or v a l u a b l e p r o p e r t y i s r e c e i v e d i n t o t h e bank, a f t e r knowledge t h a t such banker " i s i n s o l v e n t , or i n f a i l i n g c i r c u m s t a n c e s , he s h a l l be confined i n ,the p e n i t e n t i a r y not l e s s than two nor more t h a n t e n y e a r s . " The f a i l u r e of t h e p r i v a t e banker i s prima f a c i e evidence of knowledge t h a t such banker was i n s o l v e n t or i n f a i l i n g circumstances when t h e money or p r o p e r t y was r e c e i v e d ' A c t s of 1923, ch. 185, s e c . 7 , p . 424; Penal Code, 1925, a r t . 565.) Exceptions from above p r o v i s i o n s . The above p r o v i s i o n s do not apply t o p r i v a t e banks which were " a c t i v e l y engaged i n t h e o p e r a t i o n of any bank, t r u s t company, bank and t r u s t company or s a v i n g s bank" a t t h e time t h i s (1925) Act became e f f e c t i v e ; nor do such p r o v i s i o n s apply to "any bank which may have been i n s u c c e s s f u l o p e r a t i o n i n t h i s S t a t e f o r twenty y e a r s and s h a l l have suspended o p e r a t i o n s p r i o r t o t h e p a s s a g e of t h i s Act, but which s h a l l resume o p e r a t i o n w i t h i n twelve months a f t e r t h e passage of t h i s A c t . " The r i g h t to continue or resume b u s i n e s s " i s hereby e x p r e s s l y r e c o g n i z e d , confirmed and f i x e d . " These p r o v i s i o n s a l s o do not apply to a p r i v a t e banker "who has f o r a p e r i o d of one year next p r e c e d i n g t h e d a t e t h a t t h i s Act becomes e f f e c t i v e , and who, as such, i n t h e course of the l i q u i d a t i o n of any bank or t r u s t company or bank and t r u s t company w i t h i n t h i s S t a t e , has a c q u i r e d t h e a s s e t s , or any p a r t t h e r e o f , i n c l u d i n g t h e r e a l e s t a t e used as i t s banking house or p l a c e of b u s i n e s s and has assumed t h e l i a b i l i t i e s , or a p a r t t h e r e o f of such l i q u i d a t e d bank or t r u s t company or bank and t r u s t company. " (Acts of 1925, ch. 148, p . 356; Rev. S t a t s . , 1925, a r t . 541-C; Penal Code, 1925, a r t . 566.) , X-6812 -106- "Blue Sky Law1*- not a p p l i c a b l e to p r i v a t e bap3cB, (The laws of t h i s S t a t e a l s o provide t h a t the s o - c a l l e d H Blue Slsy Law" s h a l l not apply to p r i v a t e banks. (Rev. S t a t s . , 1925, a r t . 599.) UTAH. P r i v a t e banking e x p r e s s l y prohibited'. The laws of Utah provide t h a t "The e s t a b l i s h i n g or maintenance of p r i v a t e or p a r t n e r s h i p banks i s hereby expressly p r o h i b i t e d ; provided, t h a t a l l such banks now i n o p e r a t i o n s h a l l r e t i r e from b u s i n e s s or i n corporate under t h e p r o v i s i o n s of t h i s chapter w i t h i n a p e r i o d of f i v e years from and a f t e r the approval of t h i s c h a p t e r . " (Act approved March 30, 1911; Compiled Laws of Utah, 1917, T i t l e 19, ch. 6, as amended, sec. 994; Banking Laws, 1927, sec. 994, p . 9 . ) VERMONT. P r i v a t e banking b u s i n e s s p r o h i b i t e d . "A p e r s o n , f i r m , a s s o c i a t i o n o r c o r p o r a t i o n , except corporations r e p o r t i n g t o and under t h e s u p e r v i s i o n of the bank commissioner, s h a l l not a d v e r t i s e or put f o r t h any sign as a bank, banking a s s o c i a t i o n or t r u s t company, or i n any way s o l i c i t or r e c e i v e d e p o s i t s or t r a n s a c t b u s i ness as a bank, banking a s s o c i a t i o n or t r u s t company, or use t h e words ' b a n k ' , 'banking a s s o c i a t i o n ' or ' t r u s t company'; but t h i s s e c t i o n s h a l l not prevent an i n d i v i d u a l , as such, from a c t i n g i n a t r u s t c a p a c i t y . A person, f i r m , a s s o c i a t i o n or c o r p o r a t i o n s u b j e c t to t h e p r o v i s i o n s of t h i s s e c t i o n , who v i o l a t e s a p r o v i s i o n t h e r e o f , s h a l l be f i n e d not more than f i v e hundred d o l l a r s f o r each o f f e n s e . " (General Laws R e l a t i n g t o Banks, ch. 226, P a r t I I , sec. 5419; Banking Laws, 1918, sec. 5419, p, 31.) VIRGINIA. Banking b u s in es s may only be t r a n s a c t e d by c o r p o r a t i o n s ; exceptions. "No p e r s o n , c o - p a r t n e r s h i p or c o r p o r a t i o n , except c o r p o r a t i o n s duly c h a r t e r e d and a l r e a d y conducting the business of banking or t r u s t , under a u t h o r i t y of the law of t h i s S t a t e or the United S t a t e s , or which s h a l l h e r e a f t e r be i n c o r p o r a t e d under the laws of t h i s S t a t e , or a u t h o r i z e d to do business under the banking laws of the United S t a t e s , s h a l l engage i n the business of banking or t r u s t i n t h i s S t a t e ; and no f o r e i g n Corporation s h a l l do a banking or t r u s t b u s i n e s s i n t h i s S t a t e , except t h a t nothing i n t h i s chapter s h a l l prevent any person or c o - p a r t n e r s h i p or c o r p o r a t i o n from lending money on r e a l e s t a t e and personal s e c u r i t y or c o l l a t e r a l , or from guaranteeing t h e payment of bonds, n o t e s , b i l l s and other o b l i g a t i o n s , or from purchasing or s e l l i n g a l l stocks and bonds. But t h i s s e c t i o n s h a l l not apply to or a f f e c t any p r i v a t e banker or f i r m of p r i v a t e bankers who s h a l l have been engaged i n b u s i n e s s on the f i r s t day of J a n u a r y , Nineteen Hundred and Ten." ( V i r g i n i a Bank *Act, sec. 3, as amended; ch. 507, Acts of 1928, p. 1308, as amended by ch. 278, Acts of 1930, p. 7 0 2 . ) . The laws a l s o contain p r o v i s i o n s p r o h i b i t i n g persons or corporations not l a w f u l l y X-6812 - 10? engaged i n t h e "business of ba.nld.fig from using a d v e r t i s i n g i n d i c a t i n g t h a t t h e p l a c e of b u s i n e s s or the "business c a r r i e d on i s t h a t of a "bank or from u s i n g the word "bank", ""banking", e t c . i n connection w i t h the "business. ( V i r g i n i a Bank Act, sec. ch. 507, Acts of 1928, p . 1308; Banking Law Pamphlet, 1929, sec. 4149 ( 4 ) , p. 25.) P e n a l t y f o r v i o l a t i o n of p r o v i s i o n s . The laws provide t h a t any person or persons v i o l a t i n g t h e p r o v i s i o n s r e f e r r e d to above " e i t h e r i n d i v i d u a l l y or as an i n t e r e s t e d p a r t y , i n any c o - p a r t n e r s h i p or c o r p o r a t i o n , s h a l l "be g u i l t y of a misdemeanor." ( V i r g i n i a Bank Act, s e c . 4; ch. 507, Acts of 1928, p. 1308; Banking Law Pamphlet, 1929, s e c . 4149 ( 4 ) , p. 25.) S t a t e Corporation Commission may examine "books, r e c o r d s , e t c . when v i o l a t i o n suspected. The S t a t e Corporation Commission has a u t h o r i t y t o examine the accounts, "books and papers of any person or c o - p a r t n e r s h i p whom i t has reason t o suspect i s doing a "banking "business, i n order to a s c e r t a i n whether such person or c o - p a r t n e r s h i p lias v i o l a t e d or i s v i o l a t i n g , any p r o v i s i o n of the "banking a c t . The r e f u s a l to submit such accounts, "books and papers i s prima f a c i e evidence of a v i o l a t i o n . ( V i r g i n i a Bank Act, Sec. 4; ch. 507, Acts of 1928, p . 1308; Banking Law Pamphlet, 1929, s e c . 4149 ( 4 ) , p . 25.) WASHINGTON. P r i v a t e "banking "business a p p a r e n t l y p r o h i b i t e d . The laws of t h i s s t a t e provide f o r the i n c o r p o r a t i o n of "banks and t r u s t companies and mutual savings "banks to engage i n t h e "busiress of "banking as d e f i n e d "below. (Laws of 1923, sec. 3, p . 302, Laws of 1999, sec. 2, p . 93, sec. 3, p . 95, sec. 1, p . 437; Hem. Comp. S t a t s . , 1927 Sapp., s e e s . 3226 and 3229, as amended "by Laws of 1929, s e e s . 2 and 3, pp. 93 and 95, and sees. 3227 and 3228; Banking Laws, 1929, s e e s . 29-32, pp. 13-16; Laws of 1915, s e e s . 1 - 5 , pp. 549-552; Rem. Coop. S t a t s . , see. 3313 - 3317; Banking Laws, 1929, s e e s . 145-149, pp. 62-65) The laws, however, axe s i l e n t with r e f e r e n c e to the o r g a n i z a t i o n or establishment 'of p r i v a t e banks. The laws f u r t h e r provide t h a t "no person s h a l l engage i n banking except i n compliance with and s u b j e c t to the p r o v i s i o n s of t h i s (bank) a c t , except i t be a n a t i o n a l bank or except i n so f a r as i t may be authorized so t o do by t h e laws of t h i s s t a t e r e l a t i n g to mutual savings banks, * * (Laws of 1919, sec. 7, p . 730; Rem. Comp. S t a t s . , sec. 3222; Banking Laws, 1929, sec. 25, p . 1 2 . ) I t would seem, t h e r e f o r e , t h a t t h i s p r o v i s i o n and the p r o v i s i o n s d i g e s t e d immediately below, coupled with t h e s i l e n c e of the laws as f a r as t h e o r g a n i z a t i o n of p r i v a t e banks i s concerned, r e s t r i c t the t r a n s a c t i o n of a banking business to incorporated banks, t r u s t companies mutual savings banks and n a t i o n a l banks. D e f i n i t i o n of terms. "The term 'banking' s h a l l include the s o l i c i t i n g , r e c e i v i n g or accepting of money or i t s equivalent on deposit as a r e g u l a r b u s i n e s s . " X-6812 ; 241 "The term '"batik' \ where u^ed i n t h i s a c t , u n l e s s a d i f f e r e n t meaning appeal's from the context) means any c o r p o r a t i o n organized under the laws of t h i s s t a t e engaged i n hanking, other than a t r u s t company, or a mutual savings bank." "The term 'person 1 where used i n t h i s a c t , u n l e s s a d i f f e r e n t meaning appears from t h e c o n t e x t , includes a p e r s o n , f i r m , a s s o c i a t i o n , p a r t n e r s h i p and c o r p o r a t i o n , and the p l u r a l t h e r e o f , whether r e s i d e n t , n o n - r e s i d e n t , c i t i z e n or n o t . " (Laws of 1917, sec. 14, p . 375; Rem. Comp. S t a t s . , s e c . 3221; Banking Laws, 1929, sec. 24, p . 1 1 . ) Use of word "hank". e t c . , and c e r t a i n other a d v e r t i s i n g ; p e n a l t y f o r unauthorized u s e . The laws a l s o contain t h e requirement t h a t the name of every hank s h a l l contain the word "hank", hut provide t h a t only a n a t i o n a l t a n k , a hank or t r u s t company authorized by the laws of Washington, or a f o r e i g n c o r p o r a t i o n , a u t h o r i z e d by the bank a c t , s h a l l use t h i s word or the words "banking", "banker" or " t r u s t " , or other a d v e r t i s i n g i n d i c a t i n g t h a t a banking b u s i n e s s i s being c a r r i e d on* "Every person who, * * * v i o l a t e any p r o v i s i o n of t h i s s e c t i o n s h a l l be g u i l t y of a g r a s s misdemeanor". (Laws of 1925, Ex. Sess. , s e c . 1, p . 177; Rem. Comp. S t a t s . , 1927 Supp., sec. 3225; Banking Laws, 1929, sec. 28, p . 13.) WEST VIRGINIA. P r i v a t e banking b u s i n e s s p r o h i b i t e d . "No p e r s o n , p e r s o n s , c o r p o r a t i o n or corporations doing b u s i n e s s i n t h i s S t a t e , except a banking i n s t i t u t i o n c h a r t e r e d and organized under the p r o v i s i o n s of t h i s a r t i c l e and a r t i c l e one of t h i s c h a p t e r , and except a banking a s s o c i a t i o n c h a r t e r e d under a c t s of the congress of the United S t a t e ? , s h a l l use i n connection with such b u s i n e s s , or as a d e s i g n a t i o n or t i t l e , the term "bank,'" "banker", "banking", "banking company", "tanking a s s o c i a t i o n ' ' "savings bank", or " t r u s t company"; or engage i n the banking busine ss a s d e f i n e d i n s e c t i o n s s i x and seven of t h i s a r t i c l e , or hold h i m s e l f , themselves or i t s e l f out a s engaged i n any such b u s i n e s s . "Any person or c o r p o r a t i o n and/or o f f i c e r or d i r e c t o r of any corporation v i o l a t i n g any of the p r o v i s i o n s of t h i s s e c t i o n s h a l l be deemed g u i l t y of a misdemeanor, and, on conviction t h e r e o f , s h a l l be f i n e d not more than one thousand d o l l a r s ; and a t the d i s c r e t i o n of the court any i n d i v i d u a l so o f f e n d i n g s h a l l be imprisoned i n the county j a i l f o r a p e r i o d not exceeding s i x months, or both f i n e d and imprisoned, w i t h i n such l i m i t s . " (Section 2, A r t i c l e 4, Chapter 31, Code of 1931; 1905, c . 45; 1907, c . 79; 1913, c. 21; 1919, c . 60; Code 1923, c. 54, s e c t i o n 78; 1925, c. 34; 1929, c . 23, Section 1)". "No c o r p o r a t i o n c h a r t e r e d under the laws of t h i s S t a t e , or of any other s t a t e , t e r r i t o r y or s o v e r e i g n t y , except banking a s s o c i a t i o n s chartered under the laws of t h e United S t a t e s of America, and banking i n s t i t u t i o n s chartered under t h e laws of t h i s S t a t e , as d e f i n e d i n t h i s a r t i c l e , and no person, p a r t n e r s h i p or a s s o c i a t i o n of persons as a t r u s t , or other X-6812 - 109o r g a n i z a t i o n , s h a l l engage i n the "business of banking i n the S t a t e of West V i r g i n i a , or s h a l l r e c e i v e or accept d e p o s i t s of money, or "borrow money by r e c e i v i n g and g i v i n g c r e d i t s f o r d e p o s i t s , or by i s s u i n g c e r t i f i c a t e s of deposit or c e r t i f i c a t e s of indebtedness, or by making and n e g o t i a t i n g any w r i t i n g p u r p o r t i n g to be a bond, c o n t r a c t , or other o b l i g a t i o n , the p e r formance of which r e q u i r e s the holder or other p a r t y to make d e p o s i t s of money with t h e i s s u e r , or by means of any other p l a n , . p r e t e x t , scheme, s h i f t or d e v i c e . "Nothing contained i n t h i s s e c t i o n s h a l l a f f e c t the r i g h t s , p r i v i l e g e s , o b j e c t s or purposes delegated to other corporations by t h e general corporation law or other laws of t h i s S t a t e . "Any c o r p o r a t i o n or i n d i v i d u a l who v i o l a t e s any of t h e p r o v i s i o n s of t h i s s e c t i o n s h a l l be g u i l t y . o f a misdemeanor, and, upon conviction s h a l l be f i n e d not more than f i v e thousand d o l l a r s , and, i n a d d i t i o n to such p e n a l t y , every c o r p o r a t i o n so o f f e n d i n g s h a l l f o r f e i t i t s c o r p o r a t e f r a n c h i s e , and every i n d i v i d u a l so offending s h a l l be s u b j e c t t o a f u r t h e r p e n a l t y by confinement i n j a i l f o r not more than one y e a r . " (Section 18, A r t i c l e 4, Chapter 31, Code of 1931; 1903, c. 8; 1919, c . 80; 1921, c. 126; Code 1923, c. 54C, Sections 12, 14; 1925, c. 33; 1929, c. 23, Section 1 0 ) . " ** 110 •* X-6812 wig cons n r . Banking "business may only "be t r a n s a c t e d "by c o r p o r a t i o n . " I t s h a l l "be u n l a w f u l f o r any person, c o p a r t n e r s h i p , a s s o c i a t i o n , or c o r p o r a t i o n t o do a "banking "business without having "been r e g u l a r l y o r g a n i z e d and c h a r t e r e d as a n a t i o n a l "bank, a s t a t e "bank, a mutual savings "bank, or a t r u s t company "bank." (Wisconsin S t a t u t e s , ch. 224, s e c . 224.03; Banking Laws, i n c l u d i n g amendments of 1927, s e c . 224.03, p . 6 3 . ) D e f i n i t i o n of term ""bank". " The term '"bank', as used i n t h i s c h a p t e r , s h a l l "be c o n s t r u e d to mean any i n c o r p o r a t e d "banking i n s t i t u t i o n which s h a l l have "been i n c o r p o r a t e d under the laws of t h i s s t a t e a s they e x i s t e d p r i o r to toe p a s sage of t h i s c h a p t e r , and to such "banking i n s t i t u t i o n s a s s h a l l h e r e a f t e r "become i n c o r p o r a t e d under t h e p r o v i s i o n s of t h i s c h a p t e r . " (Wisconsin S t a t u t e s , s e c . 224.01; Banking Laws, i n c l u d i n g amendments of 1927, s e c . 224.01. p . 6 3 . ) P e n a l t y f o r u n l a w f u l "banking. "Any p e r s o n or p e r s o n s v i o l a t i n g any of the p r o v i s i o n s of * * * ( t h e ) s e c t i o n ( f i r s t above quoted), e i t h e r i n d i v i d u a l l y or a s an i n t e r e s t e d p a r t y i n any c o p a r t n e r s h i p , a s s o c i a t i o n , or c o r p o r a t i o n s h a l l "be g u i l t y of a misdemeanor and on c o n v i c t i o n t h e r e o f s h a l l "be f i n e d i n a sum not l e s s t h a n t h r e e hundred d o l l a r s nor more than one thousand d o l l a r s , or "by imprisonment i n the county j a i l not l e s s than s i x t y days nor more t h a n one y e a r , or "by "both such f i n e and. imprisonment." (Wisconsin S t a t u t e s , s e c . 224.03; Banking Laws, i n c l u d i n g amendments of 1927, s e c . 224.03, p . 6 3 ) . WYOMING. Banking "business may only "be t r a n s a c t e d "by c o r p o r a t i o n s . I n order to t r a n s a c t a banking b u s i n e s s a s d e f i n e d below, t h e laws of t h i s S t a t e p r o v i d e f o r t h e i n c o r p o r a t i o n of banks, s a v i n g s banks, l o a n and t r u s t companies and t r u s t company banks, (Laws of 1925, ch* 157, s e e s . 3 , 55 , 69 and 75; Banking Laws, w i t h 1927 amendments, sec# 3, p . 11, s e c . 55, p . 22, s e c . 69, p . 26 and s e c . 75, p . 2 8 . ) The law a l s o p r o v i d e s t h a t "Uo p e r s o n , f i r m o r c o r p o r a t i o n (except n a t i o n a l banks) s h a l l c a r r y on a banking b u s i n e s s except i n compliance w i t h the p r o v i s i o n s of t h i s (bank) a c t . " (Laws of 1925, c h . 157, s e c . 11; Banking l a w s , w i t h 1927 amendments, s e c . - l l , p . 13) I t i s f u r t h e r p r o v i d e d t h a t " i t -shall- b » u n l a w f u l f o r any p e r s o n o r p e r s o n s , c o - p a r t n e r s h i p or a s s o c i a t i o n to t r a n s a c t the b u s i n e s s of a savings bank, * * * u n l e s s such p e r s o n , company or a s s o c i a t i o n h a s been duly i n c o r p o r a t e d under t h i s a c t ; * * * . " (Laws o f / 1925, ch. 157, s e c . 68; Banking Laws, with 1927 amendments, s e c . 68, p . 2 6 . ) Scope" of Bank Act. / I • "Every bank, banker or c o r p o r a t i o n i n t h i s S t a t e doing a jBariking - I l l •- X-6812 "business under the p r o v i s i o n s of t h i s (bank) Act, s h a l l he known as a S t a t e hank; and any and a l l r e f e r e n c e h e r e i n made to t h i s Act to s t a t e hanks s h a l l apply to every i n d i v i d u a l , firm or c o r p o r a t i o n doing a hanking b u s i n e s s under the p r o v i s i o n s of t h i s Act. " (Act of February 15, 1539, s e c . 1; Laws of 1939, oh. 54, sec. 1 . ) D e f i n i t i o n of bank and banking b u s i n e s s . "Any person, f i r m or corporation (except n a t i o n a l banks) having a place of b u s i n e s s w i t h i n t h i s State where c r e d i t s a r e opened by the deposit or c o l l e c t i o n of money or currency or n e g o t i a b l e paper s u b j e c t to be p a i d or r e m i t t e d upon d r a f t , r e c e i p t , check, or o r d e r , s h a l l be regarded a s a bank or banker, and as doing a banking business under the p r o v i s i o n s of t h i s Act. " (Laws of 1925, ch. 157, sec. 10; Banking Laws, with 1927 amendments, sec. 10, p . 1 3 . ) R e s t r i c t i o n a g a i n s t use of c e r t a i n a d v e r t i s i n g . "No person, persons, firm or c o r p o r a t i o n s h a l l a d v e r t i s e , issue or c i r c u l a t e any card or o t h e r papers, or e x h i b i t any sign using e i t h e r or any of the terms ' b a n k ' , ' b a n k e r ' , 'banking h o u s e ' , or 1 t r u s t company', u n t i l they have f u l l y complied with the p r o v i s i o n s of t h i s Act; provided, t h a t the term ' t r u s t company' may be used by a person, f i r m or c o r p o r a t i o n when the b u s i n e s s t r a n s a c t e d i s i n no sense a banking b u s i n e s s . " (Laws of 1925, ch. 157, s e c . 11; Banking Laws, with 1927 amendments, sec. 11, p . 13.) " I t s h a l l be unlawful f o r any person or persons, copartnership or a s s o c i a t i o n * * * to assume the name of a savings bank or a s s o c i a t i o n , u n l e s s such person, company or a s s o c i a t i o n has been duly incorporated under t h i s Act; * * *". (Laws of 1925, ch. 157, sec. 68; Banking Laws, with 1927 amendments, sec. 68, p . 26) Penalty f o r unlawful banking or a d v e r t i s i n g . Any person, f i r m or corporation v i o l a t i n g any of the above p r o v i s i o n s s h a l l be deemed g u i l t y of a misdemeanor, and upon conviction s h a l l be s u b j e c t to c e r t a i n p r e s c r i b e d p e n a l t i e s . (Laws of 1925, ch. 157, s e e s . 12 and 68; Banking Laws, with 1927 amendments, s e e s . 12 and 68, pp. 13 and 2 6 ) .
@FedFRASER