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Federal Reserve Bank of St. Louis
•
iPt
MATERIALS REGARDING THE INSURANCE OF BANK OBLIGATIONS
IN VERMONT, 1831-1866
Contents
Legislation
Court decisions
Correspondence excerpts, and miscellaneous notes
Statistical data
Audit reports
•
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Federal Reserve Bank of St. Louis
PUBLIC ACTS.
A. D. 1831. lands, tenements or hereditaments, within this State,
without the assent of the devisee or devisees.
SF.C. 2. It is herebyfurther enacted, Tbat before
any
probate court shall grant license to any executor, or adNte to
&vivo.
ininistrator, to sell real estate, in preference to selling personal estate, said court shall cause notice of such •applicalion to be given to all persons concerned, in all respects,
as is required, by law, in other cases, of application to
probate courts, for license to sell real estate.
[Passed Nov. a, 1811.]
`X.).—An act, regulating the charteringof Banks.
Banking cor. Sec. 1. It is herzby enacted by the General Assembly of
v,41111(101113, here:titer created, ;the State•of Vermont, -.Chat ev,Ty monied corporation haydec. subject to .ng Banking powers, which shall be created at this seain"i"una of sion of the Legislature or which shall be hereafter creathis set.
ted,or re-chartered, shah be subject to the provisions of this
act. Sec. 2. It is herebu
Such corpora., further enacted, That for the purtiowito pay in- pose-of creating and continuing the fund herein established,
Treasury of
so .
sic
thiree. every such corporation shall, on or before the third Thurs.,
!north, of one day of October, in every year, pay to the Treasurer elf
per cent on the this State,a sum equal to three fourths of one per cent, on
capital ,toek.
the capital stock of such corporation, paid in, after except,
ing therefrom, such partIof said capital stock, as is, or may
be held by this State,and at that rate for tile lime such corporation shall have been in operation, if less than one
year.
SEC. 3. It is hereby further enacted, That at the time
Shall deliver a of making any such payment, the corporation making the
to same, shall cause to be delivered to the Treasurer ofattainment
this
Treacuter of
the amount of Stato, a statement,signed by the President and Cashier of
capit al
stock the corporation, and verified by their oath, duly made bepaid iII.
fore some officer, authorized to administer oaths specifr
ing the actual amount of the capital stock .of such corpo.
ration paid in, and designating in such statement, the amount of such capital stock, as shall be owned by the
State.
Sec. 4. It is hereby further enacted, That the said anShell continue
into nual payments shall continue to be made, until every such
to pay
Treasury until monied incorporation shall have paid into the Treasury,
i total; four and one half per cent, upon its capital stock, which
,Pari nt:,
and a half per shall be, and remain,a perpetual fund, to be de nominated
at upon eal).
the Bank Fund. and to be inviolably appropriated,-and apnal sun
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Federal Reserve Bank of St. Louis
PUBLIC ACTS.
17
plied to the payment of sue.h portion of the debts, exclu- A. D. 1831.
sive of the capital stock, of any of the said corporations,
wt 't shall become insolvent, as shall remain unpaid after
a.,,ing the property and effects of such insolvent corporation, as hereafter provided.
SEC. 5. 11 is hereby further enacted. That the treas. Treasurer
to
lire: of this state shall keep proper accounts of the said keep aparat,
bank fund, separate,
ra and distinct from the funds of this 13Caetlinftusnol"L'
state, and shall from time to time, report to the legislature
the condition thereof.
Sec. G. It is hereby further enacted, That the said fund Said fund to be
'hall be the property of the corporation, by ul,ich the same the properly of
shall_be paid,in proportion to the amount which each of ;its, copr
g:
y,D
"
such corporations shall have contributed thereto, but the &c.
treasurer Shall have power, and it shall be his duty from jrn7,7,„'%eird ILIfil
time, to invest the same, and all moneys belonging in same manthereto, in the manner provided by law, in respect to the iftuenrti as school
common school fund. And whenever it shall become necessary, for the purpose of meeting any charges on the Taasurer may
said fund, to sell any securities, in which such fund, or any ent securities
part thereof; may have been invested, the treasurer shall in certftin cases
have power to make such sale.
Sec- 7. It is hereby further enacted, That the income
arising from said fund, after deducting thereout, the salaries of the bank commissioners hereinafter mentioned,
shall annually be paid by the treasurer, to the several Inman(
raid
corporations by which the said fund shall be created, ill fend ta..Eii ;Aid
proportion to the amount which each of the said corpora- f° the several
dons shall have contributed thereto ; hut no corporation corporations.
shall be entitled to any part of said income, after it shall
become insolvent, or shall be dissolved, or its charter expire.
SEC. 8. II is hereby further enacted, That whenever In case said
fund be rodethe‘ fund, created by this act, shall be reduced, by the pay- a
soso oocorpo;
rations
r
, of the debts of an insolvent corporation, to be additional
silk
matte as hereafter provided, below the sum, as provided in ifirue.
oint
to
the fourth section of this act, every monied corporation
then existing, which shall be subject to this act, and every
such corporation, thereafter to be created, shall, on, or before the third Thursday of October, in every year thereafter pay intb the treasury of this .state, such sum
' to be designated by the Treasurer, not exceeding a
sum equal to three fourths of one per cent, on its
capital stock, as herein before provided: which last
mentioned annual payments shall continue to be made, by
every, corporation, subject to the operation of this act, until the aforesaid fund shall be reimbursed, and node to aime to
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Federal Reserve Bank of St. Louis
Is
PUBLIC
Aurt.i.
A. D. 1831— mount to the sum. as provided in the fourth section of this
act, after which such annual payments shall be suspended,
lined it shall become necessary again to resort to the said
fund, by reason of the insolvency of any such corporation.
as hereinafter provided, when the said payments shall Le
resumed,in manner aforesaid, and so on from time to time,
88 occasion may require.
SEC. 9. It is hereby further enacted, That whenever
In case of insolvency Many any corporation subject to the operation of this act, shall
such corpora, become insolvent, and shall be proceeded against, as
.
lion, a chancel- ;
Mr to make or- nereinaner provided, it shall be the duty of a chancellor
der setting forth immedAtely after a final chtbidend of the property and eftle
a- fects tirandi insolvent corporation shall have been made,
athote' m debts
said among the creditors thereof, to cause an order to be enagainst
corporation.
tered on its minutes, setting forth first the total amount of
2nd, nett a. debts against the said corporation, ascertained and estabmount of effects or said corpo- lished r the said chancellor, including lawful interest
ration.
thereon -;—Second, The nett amount of money derived
front thei properties and effects of the said corporation,
I° and applied under the direction of the said chancellor, towards tint satisfaction 'of such debts ; and Third, the total
lrd, The a- amount of moneys, then requisite to pay off and discharge
mount netessa- the said dibis. Such order shall also direct the receiver
ry to pay debts
appointeetto take charge of the property and effects of the
or wad
ration.
corporation, to apply to, and receive from the treasurer
of this state, in the manner hereinafter provided, the sum
Az- ge,e7raisf
which shall be.required to pay off and discharge the said
debts.
Ssc. 10: it -is /wryly .re'reedr...r rwseneihwi. Thsrl upon such
Receiver to file
filing with the treasurer of this state, a copy of
copy of •.rder receiver
duly certified and sighed by a chancellor, it
order,
Such
wiitiTreasurer•
Treasurer to shall be thetduty of the said treasurer, to pay over to the
pay over to resuch said receiver,such sum, not exceeding the amount of the
nnin'
pieta fund as bank fund,as may have been declared by the said challnecessary,
is
who shot' pay cellor, to be necessary to satisfy the debts of said corpo... directed by ration, and the moneys paid to such receiver, shall be paid
cbancellor.
out by him,tunder the direction of the chancellor, to the
several creditors of the corporation.
SEG. 11.. It is hereby further enacted, Tim . if at the
time of filing with the treasurer, the copy of such order,
Proceedings
the bank fund shall be insufficient to satisfy all the debts
when hank fund .
the insolvent corporation, a sum sufficient to satisfy the
ot
proves fain&
remain unpaid,shall be paid
residue
cent •
, of suCh debts,as shall
to such receiver, in the manner provided in tiv,last preced_
ing section, ont of the first moneys that shall thereafter be
paid to the treasurer, pursuant to the eighth section of this
act, and the moneys so paid to Such receiver,shall be p •
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Federal Reserve Bank of St. Louis
PUBLIC
ACTS.
19
out by him, in the manner required tu die last preceding A. D. 1831.
section.
si
12. It is hereby further enacted, That the mon- .._oncys
out of
Eid out of the treasury, and all other moneys requir- or to TrIIIIIIU
e)
be
ed by this act to be paid out of the treasury,shall be a chagge on bank
fund.
charge upon the bank fund, hereby created.
SEC. 13. It is hereby further enacted, That whenever
Wins charter,
the charter of any monied corporation, subject to thepro. els pire 61,1117
corporation
ansuch
corporation
every
vision of this act, shall expire,
ed rem**
edtiil
share of said
shall be entitl
to receive Ili proportional
its proportional
bank fund, which said corporation may have contributed shale.
thereto, after deducting thereout, a proportional part of the
charges upon the said fund, and which share the treasurer is hereby authorized to pay to said corporation.
SEC. 14. h is hereby furtlier enacted, That no creditor No creditor to
of any insolvent corporation, shall by virtue of this act, receive interact
'
i Me debt
1
receive interest upon his debt against such corporation, :.pon
.n
from and after the time such order is made, as is required
by the ninth section of this act.; nor shall such creditor be
entitled to interest, anterior to Die presentation of his Etcmend against such corporation to the receiver gbdt shall
be appointed to take charge of the proisciEy and effects of
such corporations:
This nos,
in enacted, That three per. comsitittiot.
Sac. 15. h is hereby ,e....er
to
he °P1)°i'ltsons, to be styled
• bank commissioners of the state
in
aNiointed
be
the
swill
manner hereinaf7 Duty
ed* of Comof Vermont)'
.br the ituty of one of whom it Win'men
te!: prov;ded, whose duty, 1
shalt be, at least once in twelvemonths, to visit ever, monied corporation, upon,which the provisions of this iiet shall
be binding, and thoroughly to inspect the affairs of said
corporations, to examine all the books, papers, notes,
bonds, and ,evidences of debt of said corporations, to compare the lints and lwoperty of said corporations, with the
statements to be made by them, as hereinafter provided,
;ertain the quantity of specie the said corporations
on hand, and, generally, to make such other enquiries as may be necessary to ascertain the actual condition
of the said corporations, and their ability to fulfil all the
engagements made by them.
SEC. 16.4 It is siereby further enacted, That it shall be
of
the duty of the said commissioners, or some one of. them, FUrtlieeduiv
mei come
to visit,and inspect the condition and affairs of any mue- stoner,.
ied corporation, more frequently than once in twelve
months,:if required so to do, by any one of thc moeted cor- .
porations, subject to the provisions of this art.
SEC. 17. h is hereby .furtlar enacted, That the said
commissionert, or either of them, rhall have power to ez-
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Federal Reserve Bank of St. Louis
a
PUBLIC ATb.
20
A. D. 1831. amine upon oath, all the officers, servants, or agents oi
commissioners 83'id corporations, or any other person, in relation to the
are empowered affairs and condition ot said corporations, which oath the
to examine of
commissioner:, or either of them, an.; personally aukers of such said
thorized to administer.
corporations
upon oath.
SEC. 18. It is hereby further enacted, That if the said
commissioner; shall ascertain, from such inspection and
it saiil Com- examination, or in any other manner, that any of said cormissioners find porations are
insolvent, or shall have violated any of the
said corporation insolvent provisions of this act, or acts of incorporation, or of any
they shell et,- other acts, binding on such corporations, the said commisply to a chancellor for an in. sioners shall, ialindiately apply to a zhancellor, upon bill
junction, eirc, or petition, foe an injunction against such corporation, and
• its officers, and said chancellor shall, thereupon, issue s no- •
Chancellor
tice to the cashier, or to the cashier and president, of said
b111411 Issue notire to caahist corporations, to appear,:ilt a time and place therein named,
to appear and and shew cause why an injunction should not issue against
show cause,&c.
such corporation, and its officers: and if no sufficient cause
be shown to the contrary, he shall, thereupon, issue such
•;tijunction against such corporation and its officers.
SAvii lg. It is hereby further enacted, That upon the
. issuing of sus t. injunction, and in any stage of the proceedings thereupon, ds- chancellor may appoint one or
Chancelle:
may appoint a more receivers to take chargs...4 the property and effects
receiver. &c: cd such corporation—and to collect, sne
for, and recover
the debts and demands that may be due, a"the property
that may belong to such corporation, who shall, vo all respects, be subject to the control of the chancellor; and
to such receivers shall give bonds to the treasurer of this
Receiver
give bond's.
State, in a sum to be fixed by the chancellor, granting the
injunction, with one or more sufficient sureties, for the
faithful discharge of the duties, of his cr 4.1ir .appointment, and for the due accounting for all moneys received
by them. And such receiver, or receivers, shall have full
nnd power and authority, and it is hereby made
duty, to
po,„7. „i Re. sell and convert into cash, the personal and real estate of
such corporations and execute good and sufficient titles to
the purchasers thereof, and shall apply_the;e10, so le1 —ceived as wellas the mor
-TerWhieli—sValf b_9erected or in
!Amin_
_Dosss_ssion of such corporation, exclus?vey
neeeniet to non
bills and Kos, of such corporifitaS -hinl shall;
render an SC- as soon as maybe,render an account
le such chaneelkir,
count to Chau.
of the condition and affairs of such corporation. and of his
cellor.
• proceqdings in the business of his appointment ; and in
case the money so received, shall be insufficient for the redemption of the bills and notes of such corporation, it shall
he the duty of the receiver or receivers, to pay over. •
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Federal Reserve Bank of St. Louis
ortfie
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PUBLIC. ACTS.
21
further redemption thereof, such sum or_ sums,. as he or t. u. 18.31.
"etteiv&Tront the hank fund before, named..
'tit
Ec. 1
- 07-1178 -heribyfurther enacted, l'hat it shall be
tin- ty of said commissioneri, in the month of October
in t.. .1 year, hereafter to report to the legislature, the commi.
manner in winch they have discharged their duties, and to J3 report le le•
accompany such report, by such abstracts from the re- 6il1ittule•
ports made to them, and by such other statements as they
may deem useful.
SEC. 21. It is hereby.
further enacted, That one of said
commissioners shall be elected by the joint ballot of both c(mmiininner.
houses -. of the legislature, annually, and the other two tiu`211'W"t'd
shall be elected by the respective corporations, subject to /,i , .; i ,•• .s•
the operation of this act, in manner following,each of said
„
corporations shall choose one delegate, and the delegates
chosen,
shall
meet at the court house in Montpelier, on
so
the third Thursday of October, in each year, and at the
hour of four in the afternoon, shall proceed to vote for said
commissioners, by ballot, each delegate being entitled to,
one vote, for every five thousand dollars actually paid in
of the capital stock of the corporation It/represents,
which Alan be ascertained by the affidavit o ,the president and cashier, and the person receiving a rnajority'of all
the votes so given, shall be deemed duly apppinted, and,
,
0 00 10101,
the commissioners so chosen,shall he under °nth, for the T
oath.
faithful discharge of their duty, and shall be entitled to Fees of "id
tour dollars perday, including all expenses to be paid out
of the bank fund, before mentioned.
SEC. 22. It is herebyfurther enacted, That if any such In ra.e such
monied corporatfon shall issue, or have outstanding, or in
ciroulation, at am time, an amount of notes or bills, loaned powers give, .
or put in cireulllion,.as 'honey, exceeding three times its ilchcetr";:re
'
r7it .
capital-104)qt+ then paiel i 1,-hial.actually possessed, or shall to 41010ply with '
negleortt*
al . payment to the treasurer of itrihrrsait.ition,
i an
ti'• stat
:iliik act, for the space of three ol hey alsa
rt.
bilney;
me \vhert,the same ought 01 have been enjoined. &o.
e half of its capital stock paid
miss
in,..te
11 thc payment of its bills in specie:nr,,, :
'.ays, or shall refuse to allow the officers of
such corfeoriffron to be examied upon oath, by the said
commissioner§, in relation to the affairs and condition •of
such corporation, every such corporation may be proceeded against, by the said commissioners and injoined, by
a cnanceilor as ap insolvent corporation as herein .before
provided.
.
SEC. 23. It is hereby further enacted, That every officer, agent ,a. clerk, a monied corporation
)who shall office,. of I.
npke an,); fals ate mcnts or false entries in the books of corPoreIjoii‘ s
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4
, .. -
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Federal Reserve Bank of St. Louis
or
.
22
Ft/BLitt;
l'S.
A. D. 1831. such corporation, or shall exhibit false papers, with the
;;17,3-11-.71; intent to deceive said commissioners, as to the condition of
false entries.
ec. guilty ol said corporation, shall be deemed guilty of felony, and
felony,
shall be subjected to imprisonment in the'state prison, for
How punished. a term not less than two years, nor more than ten.
Sec. 24. It is hereby further enacted, That no stockto stock hold- holder of any bank, shall be appointed a commissioner by
er t• be ap- virtue of this act, nor shall it be lawful for any commisPointed R COO" sioner, directly, or indirectly, to purchase,
or in any manmisaioner.
ncr to be concerned in any bank stock, in this State.
SEC. 25. It is hereby further enacted, That Isry carRanking corporatim" tte"ort poration snhjeet to the operation of this act, created at
ter created to
pay 50 per neat the present session of the legislature, or herealler to be
or il5 capital created, shall, before it makes any loans or discounts,
mask
Monied corpo- have at least fifty per cent of its capital stock actually
rations whose paid in, which payment shall be proved on oath,to the
sat...saner shall be isfaction of the hank commissioners, before
any such baits
bereafter axben or discounts shall be made ; and every monied
'ended. '
corporapay in ell its tion whose charter shall be hereafter
extended,shall, withcaPitRi. within in one yeapifter
such extension takes effect, pay in all it*
one year.
capital, to be proved in like manner, to said bank commissioners, but eecry such monied corporation, whose
But said eorpo•
ration may re. charter shall be so, hereafter extended, shall be permitted
a..ea iti capital to reduce its capital stock, to any-sum not below
'i.e..
the amo't
actually paid in, at the time of the renewal of its charter.
But such corporation shall, within one year, from and after the time of such renewal, file with the treasurer, a certificate, under the seal of the corporation, setting forth
the
sum to which its capital Stock is to be reduced, as aforesaid; the filing of which certificate, shall exempt such
corporation from the operation of this itetion,
to so
much of its capital stock, as shall be reduced in and
the manner above stated.
sahkinr, ccrpre
SEc. 26. It is hereby urthcr newt'
rations berea rhat if any
ter, incarra-r banking
company, herea ter incorpora
.
chartered or
ted, nut subject
p, the provi• rechartered, shall by their act te‘incorporatiooipake
the
6,0n, of Ihs private property of the stockholders, holden Or redeem
p',„`.1,„liftyP6'17 the bills by them issued, it shall not be required to coim nply
.
stunkholdars
with the conditions of this act.
ehall be trilden,
[Passed Nov. 9,1831.]
14.
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•
•.,
21
ACTS.
in relation to t4e chart•ring of A. D.
21—An act, in addition to ci act,
Banks.
of the Slate
is hereby enaaedby the General Assemblycommist.ion
- 1140k
bank
of
qv —ermont, That the first election banks by the act to
the
of
part
the
on
made
ers, to be
which this is in addition, shall be made on the third Wednesday of March, one thousand eight hundred and thirtytwo.
[Passed Nov. 9, 1831.1
1831.
Commig•
22.—An act, directing the taxing of foreign batik stock.
SEC. 1. It is hereby enacted by the General Assembly of Rank
i
l
in bt
the State of Vermont, That all bank stock owned by any owned of
inhabitant, or inhabitants of this state, in any bunk, out of out
this State, shall be given into the List and taxed at five per
cent.
SEC. 2. It is. hereby .further enacted, That the listers
in the several towns in this state, in making up their res- Lush smw.
pective lists, shall have the same power to aseertaiir, by eted to mein.
hin• bY °In-oath, or otherwise, the amount of such foreign bank stock,."
ivechezeounizi:
as by the law they now have, to ascertain the amount ot
interest money, or bank stock,owned within thi.; state.
[Passed Nov. 9, 1831.]
9t ---An act, regulating the taxation of Bank Stock.
lab 1. It is hereby enacted IN the General Assembly of
.to„..-dtate of Vermont, That it shall be the duty of the cashi
nf
i d• a.. e.
"
iers of the several banks, in this state, to transmit, in the (1-:':t
month of April, in each year, hereafter, to the town clerks inatr-ane'n%-i t
lb°
the several towns in this state, in which any of the stork- t"Ghuclef"moak
ot
holders in their respective banks shall reside, a true state- bath
ment of the amount of stock, and by whom owned, in such owned in 1:•ell
towns, as the same shall appear to 'be owned, by inspec- ,IL":„`"'"
tion of the books ofsaid banks, on the first day o-f April in
each . year.
Sac. 2. It is hereby farther enacted, That if the cashFor
ier of any of the banks in this state, shall neglret, or re- 7.P.oesityie.1:1Y or te•
day
first
the
after
from
and
days,
thirty
fuse, for more than
.4
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Federal Reserve Bank of St. Louis
PUBLIC ACTS.
al May, in each year, to make out and transmit a true and
correct statement, as aforesaid, to the several town clerks,
of the respective towns, in which stock in said banks may
he owned, each and every such cashier, shall forfeit and
par
to any person residing in the town or towns, to which
To whom for•,
sucn statement is not transmitted, a penalty of ten dollars,
feited.
and a like penalty for every additional thirty. days of neglect,
How recovered , to be recovered by action of debt, with full costs, hetore any court proper to try the same.
[Passed Nov.9 1831 1
A. D. 1831 •
•
I.swe,
Chap. 87.
24.—An act, in addition to an act, dividing. the State into districts
for electing representatives to the Congress of the United States
and directing the mode of their elections, passed November e•
!event II, one thousand eight hundred and twenty-two.
SE.e. 1. If is herein, enacted by the General Assembly of
the
State'if Vermont, That the election of representaF.lectien
of
tives to the congress of the United States, Viltich is to take
Represent,.
lives to con- place in the year one thousand eight hundred and
thirtygress to be on
lAt Tom's)
, of two,shall be.on the first Tuesday in Degember,in said year,
-Dec. Ian.
any thing in the act, to which this is an addition to the contrary notwithstanding.
•
SEC. 2. /t is hereby further enacted, That the said eTo be regula•
led by forcer lection shall take place under the same regulations, as is
ELM
provile,1 in the act to which this is an addition.
fPassed Nov. 9, 1'331.1
Comp. Laws,
Chap. SO.
2.1.—An act,in addition to an act,entitled, "an act, repilatiw town
meetings. and the choice ;mil duty of town officers," passed February twenty-eight, one thousand seven hundred and ninety-se.
yen.
Town Clink,
IC) receive the
vsme fees. for
recording
births k deaths
as for recording
marriages
It is hereby enacted by the General Assembly of the St*
of the
of Vermont, That the town Clerks and respective towns
receive the same
in this state, shall be entitled to,
compensation, for recording births and deaths, in all cases,
where it is their duty, by law, toTecord the same, as is, by
law,allowed for recording marriages, to be paid out of the
treasury of the town where such record 'suede.
[Passed Nov. 9, 1391..1
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LAWS OF VERMONT,
PASSED AT THE OCTOBER SESSION,
A. D. 1840.
PUBLIC ACTS.
1. AN ACT, RELATING TO BANKS.
SECTION
Sec'now
1. Future liabilities of banking corpo- 15. Rate of interest.
16. Restriction.—Proviso.
rations.—Prov iso.
2. When loans or discounts may be 17. Limitation of indebtedness in case
of stockholders and officers.—Furmade.—Further restrictions.
titer restrictions.
Duty of bank commissioncr.—Certi18. Issue of bills limited.
iicate to be made to the treasurer.
19. Bills and notes where payable.
4. Further restrictions.
5. Duty of bank, in case of extension 20. Liabilities of bank in case of refusal
or delay of payment in gold or silver.
of charter.—Proviso.
8. Capital stock not to be withdrawn. 21. Lt•ans to state regulated.—Provise.
Further Proviso.
7. General management.--Qualifications of directors—their term of of- 22. Condition of all loans and discounts.
93. No fractional bills to be issued.—
fice.
Penalty.—How recovered.
8. Liabilities of directors.
9. Bonds to the treasurer, how condi- 24. Semi-annual tax to be paid to stets
treasurer.—Proviso.
tioned, secured, and by whom approved.—Bonds may be prosecuted. 25. Loans on pledge of stock prohibited.
10. Restriction.
26. Real estate, to what extent may be
holden.
11. Remedy in case of delinquent directors.
27. Votes of stockholders, how apportioned—Votes by proxy.-Exceptions.
12. Officers, how appointed.—Term of
office.—Com pe nsation.--By-laws, 28. Payments on shares regulated.—NoLice to he given, 30 days before time
how made, and for what purposes.
of payment—Forfeiture is ease of
13. Cashier to give bonds.—Conditions
neglect.
of bond.
29. Assessments on shares regulated.
14. Loans and discounts.—Dividends
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'SECTION
SECTION
30. Losses of capital stock, provision for 36. Authority of bank commissioner.
raising deficiency.—Directors, for 37. His accounts, how audited and paid.
38. Bonds, when to be put in suit.—
neglect, may be proceeded against.
Avails, how applied.—Balance, how
31. Unlawful loans or discounts, or disdisposed of.
tribution of capital stock.
32. Penalty in case of over-issues of bills. 39. Conditional exemption.—Proviso.
33. Penalty in case of loans contrary to 40. Duty of bank commissioner.—Bonds
may be renewed, with additional sesection 17.
curities.—Liabilities in case of refu34. Shares transferable.—Transfers when
sal or neglect.
valid.
$5. Acts incorporating bulks declared
public acts.
It is hereby enacted by the General Assembly of the State of
Vermont, as follows:
SECTION 1. Any banking company, chartered or re-chartered,
at the present session, or any future session, shall be subject to the
provisions of this act, and to the control, at all times, of the legislature, to alter, amend, or repeal, as the public good may require ;
and shall be subject to the provisions of the first twenty-seven, and
the fortieth and forty-first sections of the eightieth chapter of the
Revised Statutes; but shall not be subject to the remaining sections
of said eightieth chapter, except so far as the same are re-enacted
in this act. Provided, that no such corporation shall be bound to
contribute for the payment of losses which shall have accrued previous to their act of incorporation or re-charter, by the failure of
any safety-fund bank.
SECT. 2. No such banking company,incorporated as mentioned
in the preceding section, shall make any loans or discounts, or issue
any bills for circulation, until at least one half of its capital stock
shall have been paid into the bank in gold and silver, and permanently deposited for, the use of such bank ; nor until the amount
shall have been ascertained, and the certificate thereof deposited
with the treasurer of the state, as provided in the succeeding section ;
and no such bank shall continue to make loans or discounts for a
longer space than two years after commencing business under such
act of incorporation, unless the whole of the capital stock allowed
in the charter shall have been paid in, subject to the provisions of
the succeeding section.
SECT. 3. The commissioner appointed according to the provisions of the eightieth chapter of the Revised Statutes, shall, on the
application of such banking company, examine the amount paid for
capital stock, and ascertain by the oaths of a majority of the directors, that such money has been paid in by the stockholders toward
the payment of their shares, and not for any other purpose; and
that it is intended that the same shall remain in said bank'es a part
of its capital stock, and the said commissioner shall make a certificate thereof to the treasurer of the state.
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4. No such banking corporation, re-chartered as mentioneu in the first section, shall continue in operation, or take any
benefit by reason of such re-charter, unless such corporation shall
have remaining in such bank, or shall cause to be paid into such
bank for capital, funds which shall be avlilable at the time, to the
full amount of the capital stock which shall have been paid in, under its original charter, and the amount ascertained, and the certificate thereof deposited with the treasurer according to the provisions
of the preceding section.
SECT. 5. Every such bank, whose charter shall be extended,
shall, within one year after such extension takes effect, pay in all its
capital, to be ascertained and certified in the manner provided in the
third section; provided that such corporation may reduce its capital
stock to any sum not below the amount actually paid in at the time
of the renewal of its charter, and may, within one year from the
time of its renewal, file with the treasurer of the state a certificate
under the seal of the corporation, setting forth the sum to which the
capital stock is to be reduced; and the sum so certified, after the
filing of such certificate, shall be taken to be the amount of the
capital stock of such bank.
SECT. 6. No part of the capital stock of any bank shall, at any
time, during the period, for which it is authorised to continue its
banking operations, be withdrawn from such bank.
SECT. 7. The stock, property, and concerns, of every such
bank, shall be managed and conducted by directors to such number
and appointed in such manner, as the act of incorporation shall direct, who shall be stockholders and inhabitants of the state, and
shall hold their offices until others are appointed and qualified to
act; and a majority of the directors shall be required to constitute
aq
SECT. S. The directors of any such bank shall be liable to pay
to the creditors and stockholders of such bank,all losses which may
be sustained in consequence of any violation, by them, of the provisions of this act, or of any other law, or other unfaithfulness in
the discharge of their official duties ; and any number of such directors may be sued in the same action by any claimant under the
provisions of this section.
SECT. 9. Further to secure the liabilities mentioned in the
eighth section, each of the directors shall execute a bond to the treasurer of the state, in an equal amount, the aggregate amount of
which bonds shall be equal to the amount of the capital stock actually paid in, with a condition for the payment and discharge of the
liabilities mentioned in said eighth section ; and such bonds shall be
secured by one or more sufficient sureties, residing in this state and
..-itot directors, or by sufficient mortgage of real estate, to be examined
and approved by the said commissioner; and such bonds shall be
for the security, and may be prosecuted for the benefit of any claimants under the provisions of the eighth section.
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Seer. 10. No director shall enter upon, or discharge any of the
duties of his office, nor shall the bank go into operation, until such
bonds have been executed and approved, as mentioned in the preceding section.
SECT. 11. Any director, who may have paid more than his share
of the liabilities mentioned in the preceding sections, may have any
proper action, in law or equity, against such other directors as shall
not have paid their full shares.
SECT. 12. The directors, after being qualified to act as such, in
the manner required by law, may appoint one of their number to
be president of such bank; and may appoint and remove, at pleasure, a cashier, and all other necessary officers and servants, and
fix their compensation; and may make all necessary by-laws and
regulations, not inconsistent with the act of incorporation, or the
laws of this state, to regulate:1. The conduct and duties of the several officers;
2. The times and places of holding, and the manner of notifying the meetings of the directors and of the corporation ;
3. The terms and conditions on which all loans and discounts
shall be made, and other negotiations of the corporation shall be
transacted;
4. The disposition of the stock, property, and effects, of said
corporation ;
5. The election of directors and filling vacancies in that office ;
And all other regulations necessary for the proper management
.of the business of the bank, and to carry into effect the purposes of
its incorporation.
SECT. 13. The cashier of the bank shall be required, before he
enters upon the duties of his office, to give a bond to the treasurer of this state, with sufficient sureties, to be approved by the
bank commissioner, in the sum of not less than twenty thousand
dollars, conditioned for the faithful discharge of the duties of his
office, which shall be for the security, and may be prosecuted for
the benefit, not only of the corporation, but of all others interested.
SECT. 14. Any such bank may loan and negotiate its moneys
and effects, by discounting on banking principles, upon such security as the directors shall deem expedient ; and dividends of the
profits of the bank may be made by the directors every six
months.
SECT. 15. Such corporation shall not receive or demand any greater
interest or discount, on any note, draft, or security, than at the
rate of six per cent, per annum ; but such interest or discount
may be calculated and taken according to the established rules of
banking.
SECT. 16. No such corporation shall, directly or indirectly,employ
its money in trade or commerce, or deal or trade in buying or selling any gonds, chattels, wares, or merchandise; provided that
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such .....rporation may sell all kinds of property which shall come
into its possession in the ordinary collection of its debts.
SECT. 17. No stockholder, director, or other officer, shall at any
one time, be, either directly or indirectly, indebted to the bank,in a
greater amount than five per cent. of the capital stock actually paid
in; nor shall any individual, company or corporation other than
such stockholder, director or other officer, be at any one time indebted to any bank in a greater amount than the sum of ten per
cent. of the capital stock so paid in, except for deposits made by
such bank for the purpose of redeeming their bills at the place-of
such redemption, or cn the purchase of bills of exchange; and all
the directors and other officers shall not, at any one time, be directly or indirectly, indebted to the bank, to a greater amount than
the aggregate amount of three per cent, of such capital stock, for
each director.
SECT. 18. No such bank shall issue bills,or otherwise contract debts,
to a greater amount than the amount of the deposits, and twice the
amount of the capital stock actually paid in; but the violation of
this provision shall not avoid any contract, or be construed to prevent the collection of any debt, contracted by such bank
SECT. 19. All the bills and notes of such bank shall be deemed to
be payable at such bank, and shall at all times be received by said
bank, on all judgments, executions, or demands, made payable
to, or the property of, such bank.
SECT. 20. If the officers of any such bank shall refuse or delay
payment, in gold or silver money, of any bill or note of such bank,
presented for payment in their usual hours of business, the said
bank shall be liable to pay the holder of such bill or note, as damag
it the rate of twelve per cent. a year, for the time during
whim each payment shall be refused or delayed.
SECT.21. At any time,within two years from the time any such bank
may be incorporated or recharted, such corporation shall bc required, when requested by the legislature, to loan to this state any sum
of money which may be so requested, to be repaid in three annual
instalments, or sooner, at the election of the state, with annual interest; provided, that the whole amount due to such bank from the
state, for such loans, at any one time, shall not exceed five thousand
dollars ; provided also, that such corporation shall not be required
to make such loan, wherr it shall be in violation of the provisions
of the eighteenth section of this act.
SECT. 22. No loan shall be made, or any bill or note discounted,
without the consent of a majority of the directors.
SECT. 23. No bank shall issue bills ofa less denomination than one
dollar, or bills which contain fractional parts of a dollar, under penalty of one hundred dollars, payable to the treasurer of the state,
which may be recovered of such bank, in an action of debt, in
the name of said treasurer.
SECT. 24. All such banking corporations shall semi-annually, at
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the times at which the directors shall usually declare the dividends of
the profits of such bank, pay into the treasury of this state one por
cent. of the capital stock actually paid in, as a tax upon the income of such bank ; provided, that if the directors shall keep a
sufficient deposit of funds in the city of Boston in the Commonwealth of Massachusetts, and shall at that city uniformly cause
their bills to be redeemed at par, such corporation shall be exempt
from such payment; but if they shall fail so to redeem their bills
for the period of ten days in the whole, in any one year, the said
tax shall be paid for that year.
SECT. 25. The directors of any bank shall not loan or pay out any
money, or allow the same to be loaned or paid out,on the pledge
of any stock in such bank.
SECT. 36.The real estate, which it shall be lawful for any such bank
to hold, shall be only such as shall be needed for the accommodation of said bank, in the transaction of its business, such as shall
have been mortgaged to it, by way of security, or conveyed to it in
payment of debts previously contracted, or set off on execution in
satisfaction of the debts of such bank.
SECT. 27. Each stockholder shall be entitled to a number of votes,
proportioned to the number of shares which may have been held by
such stockholder, at least three months betote the time of voting, according to the following rates,—one vote for each share not exceeding
four;five votes for six shares, six votes for eight shares,and seven votes
for ten shares,one vote for every five shares above ten ; provided that
no stockholder shall be entitled to more than twenty votes ;and absent
stockholders may vote by proxy, authorized in writing; but no
stockholder residing out of the state shall be entitled to vote, in any
way, in the meetings of the corporation, nor shall any stockholder
be entitled to more votes in his own right and by proxy than one
fourth of all the votes given.
SECT. 26. The directors may determine at what times, and in
what proportion, the stockholders shall pay into the bank the amount
unpaid on their shares of the capital stock; and they shall give notice thereof, by publishing their order, three weeks successively, in
some one or more of the newspapers printed in the county, where
the bank is located; or if no newspapershall, at the time, be print.
ed in such county,in one or more newspapers in an adjoining county, which shall most generally circulate in the vicinity of such bank;
the last of which publications shall be at least thirty days before the
time appointed for such payment; and if any stockholder shall neglect to make payment on any share, accordinz to such order, for
the period of thirty days from the time appointed for such payment, such share and all the moneys previously paid thereon, and
all dividends accruing or due thereon, shall be forfeited to the nee
of such corporation.
SECT. 29. If, by any means. the capital stock of any such bank
shall be reduced, the amount of five per cent. below the amount
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'hie, _ilall have been paid into the bank, it shall be the duty of the
irectors, immediately to _raise the amount of the deficiency, by
sessments on the several shares, in the manner and subject to all
le regulations provided in the preceding section, and the stockholdrs shall be subject to the liabilities, and the shares to the forfeitre provided in that section ; and the amount so raised shall be
eld and deemed a part of the capital stock, within the meaning of
is act.
SECT. 30. If the bank commissioner, on examination, shall asertain, that any of the capital stock or any 1:xmk shall have been
st, as provided in the preceding section, he-may make an order,
equiring the directors, within a time to be fixed by him, to raise
he amount of the deficiency, as provided in the preceding section,
nd give written notice of such order to the president or cashier of
uch bank ; and if the directors shall neglect to raise such amount
ithin the time limited, such corporation may be proceeded against,
y such commissioner, and enjoined by the court of chancery, as
n insolvent corporation, as provided in the eightieth chapter of
he Revised Statutes.
SECT. 31. If any such bank shall, directly or indirectly, make
fly loan or discount contrary to the provisions of this act, or if any
uch bank shall directly or indirectly, distribute or divide any porion of its caphal stock, among the stockholders of such corporaion before the expiration of its charter, such bank may be proceed- d against and enjoined as an insolvent corporation, as provided in
e eightieth chapter of the Revised Statutes.
SECT. 32. If any director or other officer of any bank, or any
•rson interested in or having chargeor control of the same, shall,
orr• v or by design, put or cause to be put in circulation any
moo... of the bills of such bank, beyond the amount limited and
.rescribed by this act, he shall, on conviction thereof, be confined
o hard labor in the state prison for a period not exceeding ten
,ears.
SECT. 33. If any director or other officer, or any person inter--ted in or having charge or control of the same, shall wilfully or
orruptly loan or pay any money, or cause the same to bc loaned
•r paid, to any director or other officer or stockholder, or individal or company, or corporation, or discount or cause to be disounted any bill, note, or other obligation or security, for any such
• irector, or officer, t31 stockholder, or individual, or company or
orporation, so that such director, officer, or stockholder, individal, or company or corporation, shall thereby become indebted to
.uch bank to a greater amount than is allo(ved by the seventeenth
.ection of this act, the person so offending shall, on conviction
thereof, be confined to hard labor in the state prison for a period
not exceeding five years.
SECT. 34. The shares in any such bank shall be transferable in
such manner as may be provided in the act of incorporation, or by
2
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the by-laws; but no transfer shall be valid until recorded in a book
kept in said bank for that purpose, nor until the person making
such transfer shall have discharged all the liabilities due from him
to such corporation.
SEC r. 35. All acts, incorporating banking companies, are declared to be public acts, and shall be construed in all courts and
places benignly and favorably for every beneficial purpose therein
mentioned.
SECT. 36. The bank commissioner is authorized to visit and
inspect the condition and affairs of any banking corporation, at any
time, on the application of any creditor or stockholder, if he shall
judge the interest of the creditors or stockholders shall require it.
SECT. 37. The auditor of accounts shall audit the accounts of
the bank commissioner, and draw orders on the state treasurer, for
such sum as he shall find justly due, which the treasurer shall pay
out of the bank fund.
SECT. 38. All bonds, taken according to the provisions of this
act, may be put in suit on the application of the receiver appointed
by the court of chancery, as provided in the eightieth chapter of
the Revised Statutes, or by order of the bank commissioner; and
the avails of all such bonds shall be applied in the same manner,
as provided in the twenty-first section of the eightieth chapter of
the Revised Statutes, until the debts of such bank shall be satisfied ;
and the balance, if any, shall be returned to the directors, from
whom the same was collected, respectively.
SECT. 39. If the directors of any banking corporation subject to
the provisions of this chapter, shall execute bonds to the treasurer
ol the state to the amount and with the security required in the
ninth section of this act, to be approved by the bank commissioner,
and deposited with said treasurer, conditioned that such directors
shall at all times pay and redeem, according to law, all the bills
issued by such bank, and shall pay and refund all deposits made in •
such bank, when such payments are demanded, while such directors are in office, such bank shall thereafter be exempt from all payments required in the eightieth chapter of the Revised Statutes, to
the bank fund, and from all the provisions for the establishment,
preservation and regulation of said fund ; and in such case, the
bond required in this act to be given by the cashier, shall be given
and made payable to such corporation ;—provided in such case,
such bank shall pay the bank commissioner, out of its own funds,
for his services in making any examination required by law.
SECT. 40. It shall be the duty of the bank commissioner, anon-.
ally, or oftener, to examine the condition of the bonds required by
this act to be given by the directors ; and he may require the same
to be renewed, with additional security, within such time as he may
prescribe ; and if such directors shall neglect to furnish security in
the manner and by the time prescribed by the commissioner, and if
the commissioner shall deem the security of the bonds insufficient,such
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be proceeded against by such commissioner,and enjoined
nk
y the court of chancery as an insolvent corporation, as provided in
he eightieth chapter of the Revised Statutes.
Approved, Oct. 28, 1840.
2. AN ACT,RELATING TO BANKS.
It is hereby enacted by the General Assembly of the State of
Termont, That whenever any commissioners are appointed by any
et of incorporation, to open books to receive subscriptions to the
pital stock in such corporation, such commissioners shall give nocc by publishing in some newspaper printed in the county in which
ch corporation is located-, a notice of the time and place where
ch books will be opened, at least thirty days before the time of
,.ening such books. Provided, if no newspaper is published in
ch county, then such notice shall be published in some adjoining
ounty, where a paper is published.
Approved, Oct. 29, 1840.
3. AN ACT, IN AMENDMENT OF THE FORTY-THIRD CHAPTER
OF THE REVISED STATUTES.
IV._ hereby enacted by the General Assembly of the State of
Vermont, That the supreme court for the county of Chittenden
,.hall hereafter be holden at Burlington on the Monday next preceding the first Tuesday in January, in lieu of the timo now provided
by law.
Approved, Oct. 29, 1840.
4. AN ACT, IN ADDITIoN TO CHAPTER EIGHT OF THE
REVISED STATUTES.
It is hereby enacted by the General Assembly of the State of
Vermont, That the auditor of accounts is authorized to draw orders on the treasurer for such sums of money in favor ot any town,
as shall be necessary to correct any error in the state tax, arising
from a mistake in the grand list of such town.
Approved, Oct. 29, 1840.
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Sec. 5. If the amount of the assets of any such bank, and the
amount of the bank fund which may be obtained from the treasury
by such receiver,shall be insufficient to pay the amount of the debts
against such insolvent bank and the costs which have accrued, the
chancellor,after decreeing the payment of the costs which have accrued, shall decree au equal dividend of the balance among the creditors of such bank, according to the amount due each creditor, and
the receiver shall pay to each of such creditors respectively the sum
so decreed to hint by the chancellor.
Sec. 6. Any person who shall have exhibited any claim against
any such bank to the receiver, shall, before any payment el his claim
shall be decreed, upon the request of such receiver or any creditor
of such bank to the chancellor, submit himself to be examined on
oath before said chancellor, if said chancellor shall so order, concerning the validity of such claim, and the chancellor, on a hearing of
any such claim, may interrogate such claimant, and receive any other evidence he may deem proper, touching the validity of any such
claim, the chancellor cooing such notice to be given to such claims
ant of the time and place of hearing as he may deem proper. And
no payment of any such claim shall be decreed, unless such claimant, when required, shall submit himself to such exatninaticm, and.
no payment shall be made on any demand against such bank, but
such as the chancellor shall find justly clue.
SEC. 7. No suit shall be brought upon the bond of any director
as an insolvent bank, after the apof any bulk proceeded against
manner prescribed by this act.
the
in
but
receiver,
a
of
pointment
the provisSEC. S. All acts and parts of acts Inconsistent with
repealed.
hereby
ions of this act, arc
SEc. 9. This act shall take effect from and after the passage
thereof.
Approved Nov. 12, Vi42,
TO CIJAPTElt EIGHTY OF THE
No.42.—AN ACT, IN ADDITIONSTATUTES:.
RE VISE.
itecrion
Section
empowered to prosecute directors fot
1„, Proceedings against insolvent bank., chancellor 3. Receiver
benefit of creditor.. Dumps recovered to be
to limit time fur presenting and proving claims.
or
dcCimed "et.- How disPwiiii
2. Chime may be stibm;tteil to clianeclAr corn- I
missioner, upon request, &c.
of the State of Fir.
It is hereby enacted by the General aesembly
moot, as follows:
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8cc. 1. In all cases of proceedings against insolvent banks
agreeably to the provisions of chapter eighty of the Revised Statutes, the chancellor, by his order, shall limit the time for the credit to present and prove their claims against such bank.
,Ec. 2. All claims presented to the receiver against such bank,
shall, upon the request of such receiver, or of any person interested in the funds of such bank, be submitted to the chancellor, or to
a commissioner to be appointed by him, for the purpose of taking
proofs, at such time and in such manner as the chancellor may order, in pursuance of the rules and usages of the court of chancery.
SEC. a. The receiver, appointed agreeably to the provisions of
'aid chapter eighty, shall have power, and it is made his duty, whenever in his 'opinion a breach of the bond of the directors of such
bank has occurred, to prosecute the 'same for the benefit of the
'creditors of said bank; and all damages recovered in such suit shall
be deemed assets of said bank, and be disposed of in the same
manner as is provided in and by said act for the disposition of the
assets of insolvent banks,
Approved Nov. 12, 1842.
43.—AN ACT,RELATING TO BANES
Stories
%sotto
k. Banks chartered prior to 1840 may be availed of 2. hlaunor of proceeding in such etuuk
3. Conditions enjoined.
benefit of the bank act of 1840, except.
is hereby enacted by the General .dssembly of the State of Ver.
d, as follows:
SEC. 1. Any-banking, company in this state, chartered prior to
the year one thousand eight hundred and forty, may avail themselves
'of the provisions of "an act relating to banks," approved October
28, 1810, with the exception of section thirty-nine of said act, in
the manner provided in section two of this act.
SEC. 2.. Any such banking company, desiring to avail themselves of flht. provisions of the act aforesaid, may, at any meeting
warned for that purpose, and warned in the manner required for
the choice of directors, vote to avail themselves of the provisions of
the act aforesaid, and thereupon such banking company shall be entitled to all the benefits and exemptions, and shall be subject to all
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the liabilities and restrictions of said act, with the exception of said
section thirty-nine.
SEC. 3. Such banking company shall not avail themselves of the
provisions of the act aforesaid, until such company shall lodge
with the treasurer of this state a certified copy of said vote, under
the seal of such company, and signed by the president and cashier
thereof.
Approved Nov. 12, 1842.
1
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APPENDIX.
Resolved, by the Senate and House of Representalives, That the Secretary of
State be directed to cause to be published with the Lifsvs, as an Appendix,
the bill to authorize the business of Banking, and the bill for incorporating
Manufacturing Companies.
Adopted by the two Houses, November 13, 1849.
AN ACT TO AUTHORIZE THE BUSINESS OF BANKING.
It is hereby enacted by the General Assembly of the State
of Vermont, as follows:
SEC. 1. The Treasurer of the State is hereby authorized
and required to cause to be engraved and printed in the best
manner to guard against counterfeiting, such quantity of circulating notes in the similitude of bank notes in blank, of the
different denominations authorized to be issued by the incorporated banks of this State, as he may from time to time deem
necessary to carry into effect the provisions of this act, and of
such form as he may prescribe. Such blank circulating notes
shall be countersigned, numbered and registered in proper books
to be provided and kept for that purpose, in the office of said
treasurer, under his dIrection, by such person or persons as the
said treasurer shall appoint for that purpose, so that each denomination of such circulating notes shall bear the uniform
signature of such register, or one of such registers.
SEC. 2. Whenever any person or association of persons,
formed for the purpose of banking under the provisions of this
act, shall lawfully transfer to the said treasurer any portion of
the public stock issued, or to be issued, by the United States,
the State of Massachusetts, New York, or Maine, such person,
or association of persons, shall be entitled to receive from the
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APPENDIX.
149
'treasurer, an equal amount of such circulating notes, of diff. _ it denominations, registered and countersigned as aforesaid;
but such public stock shall in all cases be, or be made to be,
equal to a stock producing six per cent. per annum; and it shall
not be lawful for the treasurer to take such stock at a rate above
its par value, nor above its current market value.
SEC. 3. Such person or association of persons, are hereby
authorized, after having executed and signed such circulating
notes in the manner required by law, to make them obligatory
promissory notes payable on demand, at the place of business
within this State, of such person or association, to loan and circulate the same as money, according to the ordinary course of
banking business, as regulated by the laws and usages of this
State.
•
SEC. 4. In case the maker or makers of any such circulating
note or notes, countersigned and registered as aforesaid, shall at
any time hereafter, on lawful demand, during the usual hours
of business, between the hours of ten-and three o'clock, at the
place where such note or notes is or are payable, fail or refuse
to redeem such note in the lawful money of the United States,
the holder of such note or notes, making such demand, may
cause the same to be protested for non-payment by a notary
public, under his official seal, in the usual manner; and the
treasurer, on receiving and filing in his office such protest, shall
forthwith give notice in writing, to the maker or makers of such
note or notes, to pay the same; and if he or they shall omit to
do so, for ten days after such notice, the treasurer shall immediately thereupon,(unless he shall be satisfied that there is a good
and legal defence, against the payment of susch note or notes,)
notice that all the circulating notes issued by such person
g
iik---ssociation, will be redeemed out of the trust funds in his
hands for that purpose, which notice shall be given by publishing the same in some newspaper printed in the county where the
business of such person or association is established, or in case
there is no newspaper printed in such county, such notice shall
he published in some newspaper printed at Montpelier; and the
treasurer shall be required to apply the said trust funds, belonging to the maker or makers of such protested note or notes, to
the payment pro rata of all such circulating .notes, whether protested or not, put in circulation by the maker or makers of such
protested note or notes, pursuant to the provisions of this act,
and to adopt such measures for the payment of such notes as
will in his opinion most effectually prevent loss to the holders
thereof.
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SEC. 5. The treasurer may give to any person or association
of persons, so transferring stock, in pursuance of the provisions
of this act, powers of attorney to receive interest or dividends
thereon, which such person or association may receive and apply
to their own use; but such power may be revoked upon such
person or association failing to redeem the circulating notes so
issued, or whenever in the opinion of the treasurer the principal of such stock shall become an insufficient security; and the
said treasurer, upon application of the owner or owners of such
transferred stock in trust, may,in his discretion, change or transfer the same for other stocks of the kinds before specified in
this act, or may transfer the said stocks or any part thereof, or the
mortgages, or any of them hereinafter mentioned and provided
for, upon receiving and cancelling an equal amount of such circulating notes delivered by him to such person or association in such
manner that the circulating notes shall always be secured in full,
either by stocks,or by stocks and mortgages,as in this act provided.
SEC. 6. The bills or notes so to be countersigned, and the payment of which shall be so secured by the transfer of public stocks,
shall be stamped on their face, "secured by the pledge of public
stocks."
SEC. T. Instead of transferring public stocks as aforesaid, to
secure the whole amount of such bills or notes, it shall be lawful for such person or association of persons, in case they shall
so elect, before receiving any of the said bills or notes, to secure
the payment ofone half of the whole amount so to be issued, by
transferring to the treasurer bonds and mortgages upon real estate, bearing at least six per cent. interest; payable annually or
semi-annually, in which case all such bills or notes issued by
the said person or association of persons, shall be stamped on
their face,"secured by the pledge of public stocksand real estate."
SEC. 8. The real estate so mortgaged, must be improved,
productive, unincumbered lands in this State, exclusive of any
buildings thereon, and the amount for which said lands are so
mortgaged must not exceed two fifths of the value of said
lands; nor shall any mortgage be received for a greater amount
than five thousand dollars each, and the treasurer shall prescribe
such regulations for ascertaining the title and value of such
• lands, as he may deem necessary, and such bonds shall be payable within such time as the treasurer may direct.
SEC. 9. The treasurer may, in his discretion, re-assign the
said bonds and mortgages, or any of them, to the person or association who transferred the same, on receiving other approved
bonds and mortgages of equal amount; and when any sum of
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principal of the bonds and mortgages transferred to the
i-surer shall be paid to him, he shall notify the person or association that transferred the bonds and mortgages, of such payment, and may pay the same to such person or association, on
receiving other approved bonds and mortgages of equal amount.
SEC. 10. The person or association of persons, assigning
such bonds and mortgages to the treasurer, may receive the annual interest to come thereon, unless default shall be made in
paying the bills or notes to be countersigned as aforesaid, or
unless, in the opinion of the treasurer, the bonds and mortgages,
or stocks so pledged, shall become an insufficient security for
the payment of such bills or notes.
SEC. 11. In case such person or association of persons, shall
fail or refuse to pay such bills or notes, on demand, in the manner specified in the fourth section of this act, the treasurer, after the ten days notice therein mentioned, may proceed to sell
at public auction the public stocks so pledged, or the bonds and
mortgages so assigned, or any or either of them, and out of the
proceeds of such sale shall pay and cancel the said bills or
notes, default in paying which shall have been made as aforesaid; but nothing in this act contained shall be considered as
implying any pledge on the part of the State for the payment
of said bills or notes, beyond the proper application of the securities pledged to the treasurer for their redemption.
SEC. 12. The public stocks and bonds and mortgages to be
deposited with the treasurer, by any such person or association,
shall be held by him exclusively far the redemption of the bills
or notes of such person or association, put in circulation as
mi—ey, until the same are paid.
_c. 13. The plates, dies, and materials to be procured by
the: treasurer, for the printing and making of the circulating
notes provided for hereby, shall remain in his custody, and under his direction ; the expenses necessarily incurred in executing the provisions of this act, shall be paid by the treasurer out
of any moneys in the treasury not otherwise appropriated; and
for the purpose of reimbursing the same, the said treasurer is
hereby authorized and required to charge against, and receive
from such person or association, applying for such circulating
notes, such rate per cent. thereon as may be sufficient for that
purpose, and as may be just and reasonable.
SEC. 14. It shall not be lawful for the treasurer, or other
officer, to countersign bills, or notes, for any person or association of persons, to an amount in the aggregate exceeding the
public stocks, or paha stocks and bonds and Mortgages, at
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their value, as before provided in this act, deposited with the
treasurer by such person or association; and any treasurer, or
other officer, who shall violate the provisions of this section,
shall, upon conviction, be adjudged guilty of a miidemeanor,
and shall be punished by a fine not less than five thousand dollars, or be imprisoned not less than five years in the State prison, or by both such fine and imprisonment.
SEC. 15. Any number of persons may associate to establish
offices of discount, deposit and circulation, upon the terms and
conditions, and subject to the liabilities, prescribed in this act;
but the aggregate amount of the capital stock of any such association shall not be less than fifty thousand dollars, nor more
than two. hundred and fifty thousand dollars.
SEC. 16. Such peisons, under their hands-and seals, shall
make a certificate which shall specify :-1. The name assumed
to dislinguish such association, and to be used in its dealings.
2. The place where tbe operations of discount and deposit of
such association are to be carried on, designating the particular
city, town, or village. 3. The avount of the capital stock of
such association, and the numiKer of shares into which the
same shall be divided. 4. The names and places of residence
of the shareholders, and the number of shares held by each of
them respectively. 5. The period at which such association
shall commence and terminate; which certificate shall be acknowledged and recorded in the office of the clerk of the
county where any office of such association shall be established,
and a copy thereof filed in the office of the Secretary of
State.
Sec. 17. The certificate, required by the last preceding section to be recorded and filed in the office of the clerk of the
county, and Secretary of State aforesaid, or copies thereof, duly
certified by either of those officers, may be used as evidence in
all courts and places, for and against any such association.
SEC. 18. All banking associations, or individual bankers,
organized under the provisions of this act, shall be banks of
discount and deposit, as well as of circulation, and shall have.
power to carry on the business of banking,by discounting bills,
notes, and other evidences of debt ;,by receiving deposites, by
buying and selling gold and silver bullion, foreign coin and bills
of exchange, in the manner specified in their articles of association, for the purposes authorized by this act; by loaning money on real and personal security; and by exercising such incidental powers as shall be necessary to carry on such business;
w to choose one of their number as president of such.association,
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and to appoint a cashier, and such other officers and agents as
business may require, and to remove such president, cashier; officers and agents at pleasure, and to appoint others in their
place. And the usual business of banking of said association
or individual banker, shall be transacted at the place where
such banking association or individual banker shall be located,
agreeable to the location specified in the certificate directed to
be made by the second clause of the sixteenth section of this
act, and not elsewhere.
SEC. 19. The shares of said association shall be deemed
personal property, and shall be transferable on the books of the
association, in such manner as may be agreed on in the articles of
association; and every person becoming a shareholder by such
transfer, shall, in proportion to his shares, succeed to all the
rights and liabilities of prior shareholders; and no change shall
be made in the articles of association, by which the rights,
remedies, or securities of its existing creditors shall be weakened or impaired. Such association shall not be dissolved by
the death or insanity of any of the shareholders therein.
SEC. 20. It shall be lawful for any association of persons,
organized under the provisions df this act, by their articles of
association, to provide for an increase of their capital, and of
the number of their associates, from time to time as they may
think proper, the aggregate capital not to exceed two hundred
arid fifty thousand dollars, as before provided.
SEC. 21. Contracts made by any such association, and all
notes and bills by them issued and put in circulation as money,
shall be signed by the president or vice president, and cashier
thereof: and all suits, actions and proceedings, brought or prose •ed by or on behalf of such association, may be brought or
.,ecuted in the name of such association.
SEC. 22. All persons having demands against any such association, may maintain actions at law or in equity, according
to the nature of the case, against such association by their
name; and all judgments and decrees obtained or rendered
against such association, for any debt or liability of such association, shall be enforced only against the joint property of the
association, and which property shall be liable to be taken and
sold by execution under any such judgment or decree.
SEC. 23. No shareholder of any such association shall be
liable in his individual capacity, for any contract, debt, or engagement of such association, unless the articles of association
by him signed shall have declared that the shareholders shall
be so liable.
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SEC. 24. It shall be lawful for such association to purchase,
hold and convey real estate for the following purposes: 1.
Such as shall be necessary for its immediate accommodation in
the convenient transaction of its business; or, 2d, such as shall
be mortgaged to it in good faith, by way of security for loans
made by, or moneys due to, such association; or, 3d, such as
shall be conveyed to it in satisfaction of debts previously contracted, in the course of its dealings ; or, 4th, such as it shall
acquire by way of execution. The said association shall not
purchase, hold, or convey real estate, in any other case, or for
any other purpose; and all conveyances of such real estate
shall be made in the name of the association.
SEC. 25. Upon the application of creditors, or shareholders
of any such association, whose debts or shares shall amount to
one thousand dollars, and stating facts, verified by affidavit, a
chancellor may, in his discretion, order a strict examination to
be made by a master of chandery, of all the affairs of such association, for the purpose of ascertaining the safety of its investments, and the prudence of its management; and the result of
every such examination, together with the opinion of the master and of the chancellor theretni, shall be published in such
manner as the chancellor shall direct, who shall make such order in respect to the expense of such examination and publication, as he may deem proper.
SEC. 26. If any portion of the original capital of any such
association shall be withdrawn for any purpose whatever,
whilst any debts of the association shall remain unsatisfied, no
diyidends or profits on the shares of the capital stock of the
association shall thereafter be made, until the deficit of capital
shall have been made good, either by subscription of the shareholders, or out of the subsequently accruing profits of the association; and if it shall appear that any such dividends have
been made, it shall be the duty of a chancellor, on application
of any person in interest, to make the necessary orders and decrees for closing the affairs of the association, and distributing
its property and effects among its creditors and shareholders.
SEC. 27. Such association shall be liable to pay the holder
of every bill or note, put in circulation as money, the payment
of which shall have been demanded and refused, damages for
non-payment thereof, in lieu of interest, at and after the rate of
twelve per cent. per annum, from the time of such refusal, until the payment of such evidence of debt and the damages
• thereon.
SEC. 28. The president and cashier of every association
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formed pursuant to the provisions of this act, shall at all times
1- -p a true and correct list of the names of all the shareholders
...inch association, and shall file a copy of such list in the
office of the clerk of the county, where any office of such association may be located, and also in the office of the treasurer,
on the first Mondays of January and July in every year.
SEC. 29. It shall not be lawful for any association formed
under the provisions of this act, to make any of its hills or
notes to be put in circulation as money, payable at any other
place than at the office where the business of the association is
carried on and conducted, and said bills or notes shall be made
payable on demand, and without interest.
SEC. 30. Whenever the securities deposited for the redemption of circulating notes shall, in the opinion of the treasurer,
become insufficient for that purpose, he may receive the dividends on all stocks, as well as the interest on bonds and mortgages, and shall deposit the same in some safe bank or banking
association in this State, in his, name, in trust for the associaelation, or banker, to whom the same may belong: the deposit to be made on such terms and at such rate of interest as
the treasurer may deem most conducive to the interest of
such association or banker, and to be withdrawn and paid over,
whenever, in the opinion of the treasurer, the securities of such
association or banker shall be sufileient to warrant it.
SEC. 31. The bonds and mortgages mentioned in this act,
for securing the payment of the circulating bills or notes, may
be made or executed to the treasurer.
SEC. 32. All fees for protesting the circulating notes issued
by any banking association or individual banker, shall be paid
by the person procuring the services to be performed, for which
.1 association or banker shall be liable, but no part of the
s..,urities deposited by such association or banker shall be applied to the payment of such fees.
SEC. 33. It shall be the duty of the bank commissioner, at
'least once a year, and oftener if he shall deem it necessary, to
inspect every bank established under the provisions of this act,
and report to the State auditor: 1st. The amount of the certified stock of the capital stock of the banking association, or individual banker, paid in or invested according to law, or in
pursuance of its articles of association, and the amount of such
stock as then possessed: 2d. The value of the real estate of
the association, or individual banker, and specifying what portion is occupied by the association, or individual banker, for
the transaction of business: 3d. The shares of stock held by
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such association or individual banker, whether absolutely, or as
collateral security, specifying each kind and description of stock
and the number and value of the shares of each: 4th. The
debts owing to the association, or individual banker, specifying, such as are due from moneyed or other corporations, or associations, the names of such corporations, or associations, and
the amount due from each, and also specifying the amount secured by bond and mortgage, the amount which ought to be
included in the computation of losses, and the total amount of
debts then collectable : i5th. The amount of debts owing by
the association, or individual banker, specifying such as are
payable on demand, and such as are due to moneyed or other
corporations,associations or individual bankers,the names ofsuch
corporations or associations, or individual bankers, and the
amount due to each: 6th. The amount of claims against tbr
association, or individuial banker, not acknowledged by it or him
as debts: 7th. The amount for which the association or individual banker is bound as surety, or for Which It may become
liable on the happening of contingent events: 8th. The
amount of the notes or bills then in circulation of said association or individual banker, of loans and discounts, and specie on
hand : 9th. The amount of losses of the association or individual banker (if any.) charged, specifying whether charged on
its or his capital or profits, since the last preceding statement,
and of the dividends declared and made during the same period:
10th. The amount of real estate, mortgages, and of stocks,
together with a description of snch stocks deposited by each
association or individual banker, with the treasurer as security
for the circulating notes issued; the market value of said stocks,
as near as the same can be ascertained, and the date to which
payment of interest has been made upon such real estate, mortgages and stocks, and whether said interest has been paid to
such banking association or individual banker, or passed to their
or his credit on the books of the treasurer.
SEE. 34. In case any of the said associations or individual
bankers shall refuse to submit its books papers and concerns to
the inspection of said commissioner, or whose officers shall refuse to submit to, be examined on oath, touching the concerns
of such association or individual banker, by said commissioner,
or which shall be found to have violated any law of this State,
binding upon such association or individual banker, such association or individual banker shall be liable to be proceeded
against by said commissioner in the same manner and with like
effect as any incorporated bank may be proceeded against for a
violation of its charter.
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SEC. 35. The shareholders, or a majority of them in amount,
o shall be owners of any incorporated bank •continuing the
business of banking until the expiration of their charter, and
who shall have associated themselves for the purpose of banking under the provisions of this act, shall be entitled to receive
from the treasurer, who is hereby authorized to issue to the association so formed, circulating notes, in amounts of not less
than ten thousand dollars, upon the deposit of securities of the
kind before described and required by the provisions of this act,
to an amount equal to the circulating Dotes so issued. But if
such banking association, so formed, shall not have deposited
with the treasurer during the three years next following the
date of their articles of association, an amount,equal to that required by the provisions of this act, as security for circulating
notes, previous to commencing the business of banking, the
treasurer is hereby empowered to retain the interest accruing
upon securities so deposited, until such association has complied
with the provisions of this act in relation to the amount of security to be deposited with the treasurer.
SEC. 36. If the shareholders, or a majority of them in amount, of any incorporated bank, within one year of the expiration of its charter, shall file with the president thereof a
notice n writing that they intend to avail themselves of the
provisions of this act, to associate for the purpose of banking,
it shall be lawful for the directors of said bank to purchase and
hold such stock and other securities as the treasurer is or may
be authorised to receive for circulating notes under the provisions of this act, to such an amount as they shall deem for the
interest of the shareholders thereof.
,Dc. 37. An association hereafter formed to take the place
Or an incorporated bank, whose charter has expired, or is about
to expire, may, when all the shareholders of such incorporated
bank have assented to its organization under this act, take and
hold, in addition to such real estate as is prescribed by the
twenty-fourth section of this act, such other real estate as such
bank may hold at the time of the transfer of the property of the
incorporated bank, having been received by it in payment cl
debts previously contracted to said bank, according to law.
Sec. 38. When any individual banker, or the officers ofany
banking association, desirous of relinquishing the banking business, shall have redeemed at least ninety per cent. of their circulating notes, and shall produce to the treasurer a certificate of
a deposit to his credit in such bank as he shall approve, to an
equal amount with the circulating notes of such bank unre-
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deemed, it shall be lawful for him to receive the same, and
to give up all the securities theretofore deposited by such
banker or banking association, for the redemption of circulating
notes issued.
Sec. 39. Such individual banker or banking association,
after having complied with the provisions of the last preceding
section, may give notice for two years in some newspaper in
the county where such bank shall have been located, that all
circulating notes issued by such individual banker or banking
association, must be presented at the treasurer's office within
two years from the date of such notice, or that the funds deposited for the redemption of the notes will be given up to the
bank or association; and on receiving satisfactory proof of the
giving such notice for the time aforesaid, the treasurer shall
surrender to the order of said association or bank, any securities which he may hold for the payment of any unredeemed
notes of the said association or bank.
Sec. 40. Every individual banker who shall establish banking under the provisions of this act, shall file with the treasurer
a certificate stating the town, city, or village in which he resides, and thereafter it shall not be lawful for such individual
banker to transact business under this act in any other place
than in which he resides, and in case of any change of residence of such individual banker, he shall forthwith file a
notice thereof in the treasurer's office as aforesaid. Any person
neglecting to comply with the requirements of this section
shall for such neglect forfeit and pay to the treasurer of this
State one thousand dollars, to be sued for and recovered by the
State's attorney for the county in which Such bank shall have
been established, in the name of the State treasurer.
SEC. 41. It shall be the duty of the treasurer to receive
mutilated circulating notes issued by him, and after making a
record of them, their denomination and amount, to deliver in
lieu thereof other circulating notes to the same amount.
SEC. 42. There shall be appointed, annually, a joint committee of the legislature, whose duty it shall be to examine
such of the securities deposited in the treasurer's office, by
banking associations and individual bankers, together with the
books and papers therein relating to the business of banking.
as the said committee may deem necessary to enable them to
report the true state and condition of that department to the
legislature.
Sec. 43. The report of the bank commissioner shall show
the amount of loans and discounts, over drafts, due from bauks,
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from directors of said banks, due from brokers, real estate,
scie, cash items, stock and promissory notes, bills of solvent
banks, bills of suspended banks, loss and expense account, capital, circulation, profits, amount due to banks, amount due to
individuals, amount due treasurer of State, amount due depositors on hand, amount due not included under either of the above
heads.
SEC. 44. The capital stock of every banker or banking association, established under the provisions of this act, shall be liable
to taxation,and it shall be the duty of the cashier ofsuch banker
or banking association, to transmit to the clerks of the several
towns within this State, in which any shareholders of the same
shall reside, a true list of the names of all such shareholders,with
the amount every such shareholder may own on the first day
of April in each year, which amount shall by the listers be set
in the list of such shareholder, at its actual market value.
SEC. 45. The directors of any such banking association, or
individual banker, shall be liable to pay to the creditors and
stockholders of any such bank all losses which may be sustained in consequence of any violation by them of the provisions of this act, or of any other law, or other unfaithfulness in
the discharge of their offical duties; and any number of such
directors may be sued in the same action by any claimant under the provisions of this section.
SEC. 46. Any director, who may have paid more than his
share of the liabilities mentioned in the preceding section of
this act, may have any proper action in law or equity against
such other directors as shall not have paid their full shares.
Sm. 47. Such banking association or individual banker,
. not receive or demand any greater interest or discount on
any note, draft, or security, than at the rate of six per cent. per
annum; but such interest or discount may be calculated and
taken according to the established rules of banking.
SEC. 48. No such banking association or individual banker,
shall directly or indirectly employ its money in trade or commerce, other than is in this act provided, or deal, or trade in
buying or selling any goods, chattels, wares, or merchandise;
Provided, That such banking association may sell all kinds of
property which shall come into its possession, in the ordinary
collection of its debts.
SEC. 49. All bills and notes of such banking association or
individual banker, shall at all times be received by said association or individual banker, on all judgments, executions, or demands, made payable to, or the property of, such banking association or individual banker.
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SEC. 50. All such banking associations or individual bankers shall, semi-annually, at the times at which the dividends of
profits shall, be usually declared, pay into the treasury of this
State one per cent. of the capital of such banks; Provided,
That if such banking association or individual banker, shall
keep a sufficient deposit of funds, in the city of Boston, in the
Commonwealth of Massachusetts, and shall at that city uniformly cause their bills to be redeemed at par, such bank shall
be exempt from such payment; but if they shall fail to redeem
their bills or notes, for the period of ten days in the whole, in
any one year, the said tax shall be paid for that year.
SEC. 51. The legislature may at any time alter or repeal
this act.
Sec. 52. This act shall take effect from its passage.
AN ACT FOR INCORPORATING MANUFACTURING COMPANIES.
It is hereby enacted by the General Assembly of the State of
Vermont, as follows:
Sec. 1. Associations may at any time hereafter be formed,
for the purpose of manufacturing, in pursuance of written articles, specifying the object of the association, the place where
the business is to be carried on, the amount of capital, and the
number and amount of the shares into which it shall tie divided.
Sze. 2. When such association shall be formed, they may
present the articles of their association to the judges of the
county court in the county where the business is to be carried
on, signed by the members thereof, in the presence of one or
more witnesses, or acknowledged by the signers before some officer competent to take the acknowledgment of deeds of lands
in this State ?and the judges shall cause the same to be recorded at the expense of the association, in the office of the
county clerk of said county, in a book to be kept by him for
that purpose; and thereupon, from the time of the record as
aforesaid, they shall become a body politic and corporate, with
all the powers, privileges, and incidents of a corporation, by
such name as may be specified in the articles of association, and
may have their first meeting at such time and place as the
judges aforesaid may appoint; at which meeting. any justice of
the peace of the county may preside, until a chairman or moderator shall be appointed; and said association may make such
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-1From the Laws of Vermont, of a public and permanent nature, coming down to, and
tncluding the year 1664. Compiled by authority of the Legislature, by
Daniel P. Thor on.
CHAFA4LVIII
07
reseed Nov. aa ,1851.
qp4734No
BANKS.
So, 1.
An Act, regulating the chartering of banks.
Sec. lo It is hereby enacted by the General Assembly of
Banking corporations,
the State of Vermont, Thaivcryspnied corporation ,having
hereafter created
banking powers, which shalltiiiliiited:at this session of the
&c. subject to
legislature, or which Wall be hereafter crested, or re-chartered
provioions of
Shall be subject to the prouisions)of this act.
this act.
Thatffor the purpose of creeting end cona
Sec. 2.
tinering the fund herein established, every such corporation
Such corporntione
shall, on or before the third Thursday of October, in every
to pay into
year, pay to the treasurer of this state, a saa equal to
treasury of stete
three fourths of one per cent on the capital stock of such
three fourths
corporation, paid in, after excepting therefrom, such part
of one per cent
of said caaital stock, as is, or may be held by this state,
on the
and at that rate for the time such eorporntion shall have
capital
beau in °aeration, if lees_than one year.j
stock,
That[at the time of-making any such parSec. Z.
ent, the corporation making the lame, shall cause to be
Shall deliver
delivered to the treasurer of this stato, a statement, signed
a statement
by the president and cashier of the corporation, and verified by
to treasurer
their oath, dilly made before some officer, authorised to ed.
of the amount
minieter oaths, specifying the actual amount of the capital
of capital stock
stock of such corporation ?aid in, and designating in such
paid in.
statement, the amount of such capital stock, as shall be owned
by the state.]
That the seid/ii-nnual Ayments shall conSee. 4.
every such monied incorporation shall
until
tinue to be made,
four and one half per cent,upon
treasury
have paid into the
Shall continue
shall
be, and remain, a perpetual fundl
which
stock
its capital
to pay into
end to be inviolably apprunes
the
bank
denominated
to be
treasury until
payment
of ouch portion of the
to
applied
the
ropriated, and
payments mit.
of an of the said
stock,
capital
the
of
exeluolve
debts,
to four and a
sha.l1 rennin uninsolventOis
become
shall
which
corporations,
half per cent.
effects
such insolvent
of
property
and
the
applying
paid
after
capital
upon
hereafter
corporation,
as
provided.1
stock.
That the treasurer of this state shall keep
Sec. a.
proper accounts of the said bank fund, separate, and distinct
Treasurer to
frau the funds of this state, and shall from time to time, mewl
keep separate
to the legietature the condition thereof.
accounts of acid
That the said fungi shall be the property of
aec. 6
baific fund.
corporations,
by
which the same shall be paid, in proportion
the
Said fund to be
to the amount which each of such corporations &hall have coonthe ?roperty
tributed thereto, but the treasurer shell have power, and it
of the corp.hall-be hie-tieta from tie to time, to tweet the same, and all
orations '7.ay1ng
Treas. to invest.
ec!nel-:.a..,:e401aa.ng thereto. in the ssimmr grumbled WIFE,4_
said fund in ifille`,11
_natiar or invest/moot or volvt
ewe* ehoMeed to
lmmlmx az tek. reek': aa
P...;.44A0 /sweat the elLer, aed all money.
kilemgine
thereto; td-approVed bask steak, or in suah
other prodeattve or
oattoas securities as he day fled opportunity,
in order that the
ill&0 they be a productive and aocila
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Federal Reserve Bank of St. Louis
"
;t,r1,4".EviolormummilAr
•••
may
soli securities
respect to the common school fund.aene whenever it shall
become necessary, for the purpose of meeting any charges on
the said fund, to sell any securities, in which such fund,
in ccrtein
or any earttleaeof may have been inveated, the treasurer
cases.
shall have power to eake such sala6
Sec. 7.
ThattOme_incope arising from said fund,
after deducting theseout, the solarise of the bank come
miseionera hereinafter 'mentioned, 'hall annually be eaid by
Inceee of
the treaeur-r, to the Dowel corporations, by which the
said fund
said fend shall be created, in proportion to the amount
to be eaid
which eace or the said corporations shall have contributed
to the several
coreorntions.
thereto; but noeeorporation shall be entitled to any part
of said income, after it shall become insolvent, or shall
be dissolved, or its charter expire.
That,,Chensver the fend, created by
eec. B.
this act, shall be reduced, by the payment of the debts of
an insolvent corporation, to be made as hereafter provided,
below the sem, as provided in the faurth section of this
act, every monied coreorntlon then axisting, whict, shall
In case said
be subject to this act, and every such corporation, therefund be reduced
after to be crested, shall on, or before the third Thursday
said coreorations
of October, in every year thereafter, pay into the treasury
to pay
of this state, such sum to be designated by the treasurer,
dditional sum
not exceeding a sum equal to three fourths of one per cent
from ties
on its capital etock, as herein before provided: which
lastmentioned annual payments shall continue to be made by
to time.
every corporation, subject to the operntion of this act,
until the aforesaid fund shell be reimbursed, and made to
amount to the sum, as erovided in the fourth section of
this act, after which such annual payments shall be suppealed, until it shall become noceasery 'mein to resort to
the said funk!, by reason of the insolvency of any such
corporction, as hereinafter provided, when the said paymanta shall be reeueed, in manner aforesaid, and so on
frow tiee to tie, as occaeion may require.7
eec. e.
That. whenever any corporation subject to
the operation of this act, shall become insolvent, end shall
be proceeded againet, at' hereinafter provided, it shall be the
In case of inaolvency
duty
of a eh:Jeweller immediately after s finel dividend of
of any such
the
property
and effects of such ineelvent corporetion shall
corporation, a
made,
among the creditors thereof, to cause an
have
been
chancellor to mtke
entered
on its Mitalt05, setting forth first the
order
to
be
order settiag forth:
total amount of debts against the said corporation, ascertained
and established by the said chancellor, including lawful inlot, t..lo aeount of
terest
thereon; - second, the net amount of money derived from
debts agatnet etd corp.
the
properties
and effects of the said coreoretion, and
end, Net aaouot of
under
heelied
the
direction of the said chancellorptowards
effeete of said CJ 7-.
the
of
such debts; and thine, the total amount
satisfaction
ere, ehe aeouat niece
requisite
to elle, off enadischarge the seid
of
moneys,
then
emery to ete de:eta of
debts.
Such
order
shall
also
direct the receiver apeointed
said core.
to take charge of the proeerty and effects of the corporation,
to apply to, and rereive from the treasurer of thte state, in
the manner hereinafter provided, the sum which
shall be
Treasurer
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Federal Reserve Bank of St. Louis
0.16
required to ewe off and discharge the said debts.
See. 10.
Thetupon :1204 receiver fil'ne
with t'e treasurer of thin state, e noee of such or6er,
duly certifiedleel signe, by a ehencellor, it shall be
the duty of the 'aid treasurer, to puy over to the said
receiver,
pay
over
to
snob VIUL# Aot excead!ng the aeount of the bank
Treasurer to
part
fund,
such
of
a3
may
have beet declared by the said chancellor*
receiver
no00gslry,
t3
113
fund
to be necessary to setiefy the debts of said corporation,
as
who ohall pay
directedend the money
aid to nech receiver, ehell he pald out by
by chancellor.
him, under the direction of the chancellor, to the
several creditoro of the corporation.
Sec. lleeeThat L4. at ehe tie.) or fillee with
Proceedings
the treasurtr, the copy of such order, tbe bank fund shell
when been fund
be ineutfecient to eatisfy ell the debts of the insol)roves ineuffvent coneretion, a cum outaetont to uatisfy the residue
icieet.
of ouch debts's ee ele,11 reeain unpeie, zhall be eeie to
filch receiver, in the eanner peovidod in the leet precediue
section, out of the first Loneye that ahall thefeefter be
paid to the treeeercr„ purouent eo the eighth section or
this) act, and the money') go paid to such receiver, shell
be paid out by him in the manner required in the last
preceding sectien.3
te____ThatLtee raoneye peid out of tle
elec.
Uoneys eaid out of
trsagory, and ell other manea required by this net to be
a-tutelary to be a
paid cut of tbe treepere, shell be e charge upon tws
arse 04
belle rued, "eereby created
bank fend.
.a:Li_Thrttirit.euever the charter of Any wonted
See, 1.34coreoation, setject te the provision of this act, 41%11
When- charters
expere, 'wore such oorporetioa hnU be entitled to receive
exeire evere
its propertiorel ehere or said been rune, which said eorpe
corporetion eneve contribeted theeete, after deducting Verooration rn
title' to receive
eel, a proportianal part of the thargeo upon VA.* sa!t
its eroportional
end which ahem the treenneer is hereby eetholised to
ehare.
pay to na e
TFtLno creditor of any tueoLvent coeeNo creditor to
oratioe, sh-11 be ieet 4e of thin act, receive Intereet 4p4,11
hic debt ay._ tun euch corpoeation, from ana rter the tLee
reoeive Intern'et
such order iz made, as in required by the niall seetiou of
upon his debt,
thie nct; ner
JJa orediter be entitled to IntereA,
ec. n ertaie
anter1or to the eresentetion of his deeend Against sue coreCAUSeti.
oretioe, to the recover Oct shell bt apeointed to hte
oherge of the eeeeerty and effects of sech coreoretiens.1
eoc. 15e,1*Met thla persons, to be styled f'e
Comrieeionern
cr
"Dew
the etaic of Ver-ont," shall be
eeee no. Z.
apeointed in the eanner teereinaftee provided geehoee (iete, )r
the .lute of one of whoelit shall be, at least OAC in twelve
Three bank comelier
moetbe, to etnit every write corporation, :pen which ttt
tonere to be appt'd.
provielens of this net nhell be bindiee, and thoroeghly to
ineeect
the z'tir o7 aeid corporatiees, te (wain ele the
'ety of come
books,
notes, bones, ad evidences of debt of &nit.:
papers,
.AniOners.
corporn,tiene, to creeper. tle .unde aid property of said coreoretione, with tne etetemeete to be suede by then, as hereinquantity ef speale the eau
aft-r erovided. to nee nate the
corporStiono 1eve on 1-enn, end, generally, to ark, mach other
Receiver to rile
copy of order
with treasurer.
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Federal Reserve Bank of St. Louis
ineviems az exy be neeenaery to ascertain tie actual
condition of the said corporations, and their ability
to fulfill all the cegaeoecpar. elide by
Sec. leie .eee
Thatlat shale be the duty of the
eaid eommonera, nr some one of then, to visit and
Fmrther duty of
iI.pect the condltion end affairs of ally nenied corpsaid coee
oration, more frequently than once in twelve months,
missionere.
if required lo to do, by any one of the monied carpmetions, eueleet to the proveniens or this aet.7
en,. 17. - Thet. the aate eommissioaers, or
eier ea them, aell have roomer to amusing upon with,
Commissioners are
empowered to
all the officers, aervants, or agents of
d corporations,
examine officers
or aw ether person, in relation to the affairs and cone
of auch coreoretions
on of said corporetions, which oath the said come
upon etth.
maasioeera, or either of than, are personally authorised
to administerg
ee
!bag! the said eouniesioaes
shallIe
sc!! e'2, frci:Li such inepectioe and examinetion,
If said commiseloners
or in any other manner, tbat any of said coreorations
find said
corporction inzolvent
are tneelYent, or ehall have violated any of the provisions ef thia act, or acts of incorporntion, or of
they shall re,
aey other acts, bladlng oncerporations, the seid
kely to a chancellor
for an tnjunction,&c.
CO=i3SiOANITS I
lmmediately apely to a chancellor,
upon bill or petition, for nn injunction ageinat such
coreoretion, and ita officers, aed said caancellor shell,
ahancellor ahell it ue
theh-enpons i5811110 a notice to the cashier, or to the cashier
notice to cashier
end prenident, of said corporations, to epeeftr, at a ties
to eppear and ehow
and place therein espied, and show cauze why an ilalunction
cause, &c.
ehoold not issue against seett coreoratioa, and its
and if na sufficient cause be shown to the
centrery, be shall, thereupon, id41110 SIJOh injunction
agniest ouch oorporrtion and its offieerse
Sec. 12.
ThatLepon the issuing of such ine
Chaacellor nay
jusetien, ene in Jele etage of the proceeding& theeeuean,
appoint a receiver,
the chancellor may apeoint one or more rocsivers to
&e.
take °hero of trT33 property and off/ante of such corpand to collect, sue for, tied recover the
oration
Receiver to give
debts and deeAnde that ma; be dee, and the property that
bonds.
may belong to ducat oorporetian, who enali, in all
reeeecte, be aehject to the control of the chancellor;
Duties and power's
eleandeouch receivers ehall give bonds to the treasurer of
of receiver.
this atate, in a aum to be fixed by the chancellor,
granting the injunctien, with one or woe* sufficient
Receiver to
euretlea, for the faithful diecbargo of the duties,
render an account
of hie or their appointments and for the dem accountine
to chancellor.
for ell moneys received by themi] And stich
.
receiver, or
receaverm, shell have full peace and eutherity, and it
ie hereby made thoir duty, to sell and convert into
cash, the personal and real estate of such corporations,
aId execuas good and sufficient titles to tho purchasers
thereof, amid shell appay the cash, so received, as well
ea the aaamy whioh shell be collected, or in possession
of such eorporetion, exclueively to the redemption of
the 011ie and 5otee, of such coreoretion, ana shall, as
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Federal Reserve Bank of St. Louis
- 5-
Commiesioeere
to reeort to
legisleture.
Cenniteioners
hew appointed.
.To be under
oath.
ftes of
R
commissionere.
In cattle such
corporation eme
coed the powers
given them, or neglect or refnee to
comply with the
reneimions of thie
atatete, they shall
be injoined,
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Federal Reserve Bank of St. Louis
ba, render an ec'7,
soon an
)nnt to omh :hawellor, of
affairs
of aiJoh corlorction, .1111ii of IA.s
the coedition oud
t‘
‘
,
lr
bual.noso
lf
proceliVa:,s
and . tn
ee
moeey
received,
shell bo inseffictent for the
case the
redemption ef the bills and notes ef such eorporation, It
shall be the duty of the receiver or reoeivere, to pen
over, it further redeeetion thereof, such sum or sum, as
he or they shall receive from the hank fund before ;weed.
ThettAt shall be the dety of skid
/*:
Cat'•
coeirleslonoien, la the meute of Oetnber In each year, hrr-o, the monner in which
after to report to the 'leileletere-1
discharged
their
duties,
and tc. eccempeny cuch
they have
ahetracta
from
the
reports melte to them,
report, by emeh
amd be eueb otter eteteeente ar they eey deee eeefel;',
?net one of neAd. eenelseieni,r
Z:ec. Vireshall be elected by the joint ballot of both ht.:uses !;N:
the legislature, annually, end the other two shell be
elected by the respective cereoretions subect to the
A
each of saidi
operation of thls act, in miner following:
'ane the delegates
corpora:tient:
, shell &loose one delegate
hew°
in Moetonier,
court
ohesen„
shall
the
eeet at
ao
on the third Theredae of October, in each yeer, and at
the hoer of foor in the aftrnoon, shell proceed to vote
for said commissionere, by ballot, each delegate beim
entitled to one vete, for every five thenernO dealers
ectealy pale! iu of the capital etc:A of the corporation
he reeresenta, rhich shell be aecertained by the effadamit
ef t•I'm preoident end carbler, rne the eereon receiving a
majority of all the votes no eiveneshall be deeeed dely e,
appointedl iree]theeeMeienlenern nnecheseee(hall ne
modem oath, for the fhithful diecharge of t eir duty* and
*tall be entitled to foer dollar?' per dee* Including all
ampeasoo, to be,paid out of the beef! fungi, before eentioned.
enc. eg..zo
Thnt/jf any ouch monied eorporation
shall issue, or have uutstanding, or in circulation, ot any
time, AM am,Int of notes or bills, loRnee er put in
celatioe* as money, oxeeedtng three tIees Ito ceoital atock„
then paid i=, and actually eoseemeed, er sheD neglect to
make ney annuel payment to the treaeer-r ef this state,
required by this act, for the apace of three months after
the time whoa the same oeght to have been made, or than
eeid in, or shall
heave loet one half of its ceeitel
hove ceeeenaded the enenont of tta hIlle in mpecie, for sixty
days, er ohell refeee to ale°, tho offIeees of such corporation to bo oxeeinod upon oeth, by the said commissioners,
in elation to the affairs and condition of such .4 II
every en& eoreoretten mey be ereeeeded aeoinste by the
said mentseienere and ined* by n chenoellor N8 an ine
aolvent corporation as herein before erovi4ed.7
Thot every efficer, aliaMt or elerk,
Sec. Rtg. e
of a monied oorwrationy I'M shell 4ake any false statements
I
or false entries in the books of such corporation, or
shall exhibit false papers, with the intent to deceive
said commissioners, ha to the condition of maid coreoration,
shall be deemed guilty of felony, and shall be subjected
to imprisonment in the state prison, for a term not leas
than two years, nor more then ten.:"
ThatIne stockholeer of any bsnk, nhall
Sec. 44. e
be appointed a commissioner by virtue of this act, nor
shall it be lawful for any cow.dasioner ,
No otockholder
s directly, or
indirectly, to eurchaae, or in any manner to be concerned
to be appointed
a comeiaeioner•
in any bank stock, In this state.
Sec. efi.
doreorettan subject to
the operation of this act., created at the present eession
Banking coreof the legislature, or hereafter to be created,/shall,
oret:olo
before it eakeesey loans or discounts, have at least
;.ented to
fifty ,)- or coot. of Us entt,13tock tactually aid in,
,fL,.• In 51.) ,er
11-t.
whl.ch ?nyment shall be proved on oeth, to the satisof ra ltal stock.
faction of the bank comeissionerlx before any Me' loans
or discounts shall be made;'end krier:y monied corporetion
:400od ch)r ..cirittins
*home charter shall be hereofter extended, shall,
eharters shall
bc hereafter extended,
within one year after such extension takes effect, pay in
anner, to said
all its capital, to be proved in lie
aeell pay in all
bank 00miai98ioners4 but wftry ouce monied corpor-tion;
lir capital,
whoot chartor shell. be so, hereafter exteeded, ehall be
_thin one yeer.
permitted to reduce ite capital stock, to tiny sum not
below the /mount actually paid in, at the time of the
But said cor,7orJtioas
renewal of its cherterli Buteiuch corporation shall,
may reduce their
within one yonr, from and after the time of such renewal,
capitel
file with the treasurer; t certificate, ender the seal
stock.
of the eorporntion, setting forth the sum to which its
eaeital stock is to be reduced aa aforesald; the eUing
of which certificate shall exeapt slice corporation from
1s eectioqj aeCto so much of its
the operetiolge
capital stock, as shall be reduced in the manner above
stated.?
ThatO
:
.
Sec. 26.
f any beneing company,
hermfter incorted, chartered or re-chartered, shell
leineine coreorotions
hereart r incoreoreted, by their act of incoreoetion, eeke the ?rivet@ proetrty
not subject to the oro- of the stockholder, eolden to redeem the bills Or -them
issued; It shell not be required to comply with the
visions of this act,
conditions of thee act'',
if erivate prceerty
of stockholders
ehall be holden,&c.
Officers of smith
coreorations,
who shall make
false entries,610.
guilty of felony.
How punished*
No. 2
An art, in addition to en *et, in relation to the
chertering of banks.
-- seed ;err.
It lo herebl_sgected be tee GereralAseeptele ,),f the
state or Vereced., That the firot election of bank come
nk coweisaienere
eissioners,
to be aade on the :art of the banks by the
frlen to be elected.
act to "'Ma this in in addition, shall be made on the
third Wednesday of mereh, one thousand ei4t hundred mnd
*See no. 1, ec.15.
feleee_oee.“
. . , elig0111011NPW°exe "eec.
If aAy dirset)r, or ether officer of any bank,
or se
\r,
erson interested in, or heving charge or control
of no veep eOell, eorruele Hit or caeee
to he eut in
circulation any amount of the bills of such bank beyond
the amount limited and prescribed by its charter,
he shall
be confined to herd later in the state ertson
for a term
not exceeding ten yeere.
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Federal Reserve Bank of St. Louis
"sec. 63."lio person shall take or borrow, from
eny bank
hereafter chartered or rechartered, any eoney by
reason
of the pledee of any stock in such
bank.
"sec. 64.- The etookholdeos and officers of any
hank shall
not, at any one time, be either directly or indirectly
imiebted to such bank to a greater amount, in the whole,
than fifteen per cent, of the capital stock of
such bank,
actually paid in; and no individual stockholder,
or officer
of such bank, shall, at any one time, be
indebted to the
same, either directly or indirectly, to a
greeter amount
than two thousand dolltirs; nor shall such
stockholder or
officer, either directly- or indirectly receive
any loan
or dtacount at such bank, unleee he shall
erocure two good
tnd sufficient euretiee for te saes,
neither of whom shall
be stockholders or officers of such
bank.
-1-
•
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Federal Reserve Bank of St. Louis
* Sec. 5. I' any bank ellen, directly or Indirectly, make
any loan or discount, contrary to the provisions of the
last two seotions, such corporation may be proceeded
against and enjoined by the court of chancery as an
insolvent corporation, as herein before erovided.
"6ec. 36. - Ad bank, hereafter chartered or rechartered,
shall make any loans or discounts until the whole
amount of the ceeitel stock of such corporrtion hell be
actually paid in, in gol..1 or silver coin, ehich eaymen
t
shall be 'roved, as erovided in the twenty eighth
section of this chapter,
34e. 37;if ane bank, hereafter cherter or rechartered,
shall, directly or indirectle, distribute or divided
any portion of its ceeital stoat among the otockholders
of such corporation, before the expiretion of its charter,
such bank may be proceeded against and enjoined as an
insolvent corporation, agreeably to the eroviaions of
this chapter.
"Seo.ZEW,Irne duties and services of the barx comeittee
shall be confined and limited to such beees oole at; are
not subject to the visitation and examlnetioo of the
beak comxissioner, appointed agreeably to the proviaions
of this chapter.
ISec. 5j. The auditor of accounts shell audit the accounts
of the bank commissioner, and draw orders on the state
treasurer for such sum as he shall find justly due, which
the treasurer shall .)1.
,y out of the bank fund.
.#
03eo. 40:4hea a banking corporation may desire to cloee
its businese, before the expiration of the time limited
for its duration, by its charter, tee governor, on
applicetion of such coreoration, mey iesue his pro—
clamatioo, designating Some day for the termination of
the fy.15.tance of such corporation, which day shall be,
tt leaet, aix months after the issuilie of auch proclamation;
and euch coreoration, on the day thus desigeate0, ohall
comae to exist, as fully end with the same effect as if
its charter had expired by the limitation the-etin
contained. ,
*3ftc. 41. Mae governor shall not issue such proclamation
unlesz it stall be made to spear that two thirds of
the legal votes of the stockholders shall have been
given in favor of such applicetion.
-1-
•
From the Laws of Vermont, of a public and permanent nature, coming down to, and
including the year 1834. Compiled by authority of the Legislature, by
Daniel P. Thompson.
CHAPTER LVIII
OF CHARTERING BANKS.
-- )assed Nov. 9, 1831.
No. 1.
An Act, regulating the chartering of banks.
Banking corporations, •/Sec. 1. It is hereby enacted by the General Assembly of
the State of Vermont, That every monied corporation2having
hereafter created,
banking powers, which shall be createdkat this session of the
subject to
provisions of
legislature, or which shall be hereafter created, or re-chartered.
shall be subject to the provisions of this act.
this act.
That for the purpose of creating and conSec. 2.
Such corporations
tinuing the fund herein established, every such corporation
to pay into
shall, on or before the third Thursday of October, in every
treasury of state
year, pay to the treasurer of this state, a sum equal to
three fourths of one per cent on the capital stock of such
three fourths
corporation, paid in, after excepting therefrom, such part
of one per cent
of said capital stock, as is, or may be held by this state,
on the
and at that rate for the time such corporation shall have
capital
been in operation, if less than one year.
stock.
That at the time of making any such pay/ Sec. 3.
ment, the corporation making the same, shall cause to be
Shall deliver
delivered to the treasurer of this state, a statement, signed
a statement
by the president and cashier of the corporation, and verified by
to treasurer
their oath,(duly made before some officer, authorized to adof the amount
minister oaths, specifying the actual amount of tl-e cf!ditra
of capital stock
stock of such corporation paid in, and designating in such
paid in.
statement, the amount of such capital stock, as shall be owned
by the state.
That the said\ 'annual payments shall conv/Sec. 4.
tinue to be made, until every such monied incorporation shall
have paid into the treasury four and one half per cent,upon
Shell continue
its capital stock which shall be, and remain, a perpetual fund,
to pay into
to be denominated :the bank fund' and to be inviolably apptreasury until
ropriated, and applied to the payment of such portion of the
payments ain't.
debts, exclusive of the capital stock, of any of the said
to four and a
corporations, which shall become insolvent, as shall remain unhalf per cent.
paid after applying the property and effects of such insolvent
upon capital
corporation, as hereafter provided.
stock.
That the treasurer of this state shall keep
/ Sec. E.
proper accounts of the said bank fund, separate, and distinct
Treasurer to
from the funds of this state, and shall from time to time, report
keep separate
to the legislature the condition thereof.
accounts of said
,That the said fund )shall be the property of
/Sec. 6.
bank fund.
the 'corporations, by which the same shall be paid, in proportion
Said fund to be
to the amount which each of such corporations shall have conthe property
tributed thereto, but the treasurer shall have power,
of the corpand it
ola
ill
lrsb:eZi
e;
duty from time to time, to invest the same, and all
orations paying el
Treas. to invest
ilf7 thereto, kr tlio
flIrr1 Tn
•
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Federal Reserve Bank of St. Louis
f
-2-
respect to the common school fund. And whenever it shall
become necessary, for the purpose of meeting any charges on
the said fund, to sell any securities, in which such fund,
or any part.thereof may have been invested, the treasurer
shall have power to make such sale.
That the income arising from said fund,
/Sec. 7.
after deducting thereout, the salaries of the bank commissioners hereinafter mentioned, shall annually be paid by
Income of
the treasurer, to the several corporations, by which the
said fund
said fund shall be created, in proportion to the amount
to be paid
which each of the said corporations shall have contributed
to the several
thereto; but no corporation shall be entitled to any part
corporations.
of said income, after it shall become insolvent, or shall
be dissolved, or its charter expire.
That whenever the fund, created by
v Sec. 8.
this act, shall be reduced, by the payment of the debts of
an insolvent corporation, to be made as hereafter provided,
below the sun, as provided in the fourth section of this
act) ever:, monied corporation then existing, which shall
be subject to this act, end every such corporation, thereIn case said
efter to be created, shall on, or before the third Thursday
fund be reduced
of October, in every year thereafter, pay into the treasury
said cornorations
of this state, such sun to be designated by the treasurer,
to pay
not exceeding a sum equal to three fourths of one per cent
Ational sum
on its capital stock, as herein before provided: which
from time
lastmentioned annuel payments shall continua to be made by
to time.
every corporation, subject to the operation of this act,
until the aforesaid fund shall be reimbursed, and made to
amount to the sun, as provided in the fourth section of
this act, after which such annual payments shall be suspended, until it shall become necessary again to resort t(
the said fund, by reason of the insolvency of any such
corporation, as hereinafter provided, when the said payments shall be resumed, in manner aforesaid, and so on
from time to time, as occasion may require.
That whenever any corporation subject to
/Sec. 9.
the operation of this act, shall become insolvent, and shall
be proceeded against, as hereinafter provided, it shall be the
In case of insolvency
duty of a chancellor immediately after a final dividend of
of any such
the property and effects of such insolvent corporation shall
corporation, a
have been made, among the creditors thereof, to cause an
chancellor to make
order to be entered on its minutes, setting forth first the
order setting forth:
total amount of debts against the said corporation, ascertei
and established by the said chancellor, including lawful in1st, the amount of
debts againat std. corn. terest thereon; - second, the net amount of money derived fr
the properties and effects of the said corporation, and
2nd, Net amount of
applied under the direction of the said chancellor,towardr
effects of said corp.
the satisfaction of such debts; and third, the total amounl
The amount necE ---discharge the avid
:
of moneys, then requisite to pay off -weary to pay delts of
corp.
debts. Such order shall also direct the receiver appointed
to take charge of the property and effects of the corporatior
to apply to, and receive from the treasurer of this state, in
the manner hereinafter
provided, the sum which shall be
Treasurer may
sell securities
in certain
cases.
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Federal Reserve Bank of St. Louis
required to pay off and discharge the said debts.
41
/
Feceiver to file
coly of order
with treasurer.
That upon such receiver filing
/Sec. 10.
with ti-e treasurer of this state, a cony of such order,
duly certified and signed by a chancellor it shall be
the duty of the said treasurer, to pay over to the said
such sum, not exceeding the amount of the bank
receiver,
to
over
Treasurer to pay
may
as
have been declared by the said chancellor,
fund,
of
receiver such part
to satisfy the debts of said cornoration,
necessary
be
to
fund AS Is necessary,
to such receiver, shall be paid out by
moneys
paid
the
dand
who shall pay es directe
of the chancellor, to the
him,
direction
under
the
by chancellor.
several creditors of the corporation.
That if at the time of Mini: with
iSec. 11.
of such order, the bank fund shall
the
copy
the
treasurer,
Proceedings
all the debts of the insolbe
to
satisfy
insufficient
fund
when bank
to satisfy the residue
sufficient
sum
a
vent
corporation,
eroves insuffshall be arid to
unpaid,
remain
shall
of
as
debts,
such
icient.
such receiver, in the manner provided in the last preceding
section, out of the first moneys that shall thereafter be
paid to the treasurer, pursuant to the eighth section of
this act, and the moneys so paid to such receiver, shall
be Paid out by him in the manner required in the last
preceding section.
That the moneys paid out of the
v Sec. 12.
of
foneys eaid out
and
moneys required by this act to be
all
other
treaa,ry,
Aik asury to be a
of
out
shall be a charge upon be
the
paid
treasury,
IlWrge on
fund,
created.
bank
hereby
Jk fund.
That whenever the charter of any monied
ol Sec. 13.
the provision of this act, shall
to
corporation, subject
When charters
shall be entitled to receive
corporation
every
such
expire,
expire every
fund, which said corpbank
said
of
its
share
proportional
corporation enafter deducting therethereto,
contributed
have
may
oration
titled to receive
upon the said fund,
charges
the
of
part
out,
a
proportional
its pronortional
to
authorized
hereby
is
treasurer
and
the
share
which
share.
pay to said corporation.
That no creditor of any insolvent cornSec. 14.
of this act, receive interest upon
virtue
by
shall
oration,
to
creditor
No
from and after the time
corporation,
such
his
against.
debt
interest
receive
by the ninth section of
required
is
as
made,
such
is
order
debt,
his
upon
entitled to interest,
be
creditor
such
shall
nor
this
act;
certein
in
&c.
against such corp—
demand
his
of
presentation
the
to
anterior
cases.
oration, to the. receiver that shall be appointed to tke
charge of the property and effects of such corporations.
L*That three persons, to be styled the
Sec. 15.
of the state of Vermont,1, shall he
Commissioners
"Bank
*See no. 2.
appointed (in the manner hereinafter,provided,:whose duty, or
the duty of one of whom it shall be; at least once in twelve
Three bank COMAiSSmonths, to visit every monied corporation, upon which the
loners to be apptid.
provisions of this act shall be binding, and thoroughly to
inspect the affairs of said corporations, to examine all the
itv of combooks, papers, notes, bonds, and evidences of debt of said
l. sioners.
corporations,Ao compare the funds and property of said corporations, with the statements to be made by them, as hereinthe said
after provided, to ascertain the quantity of specie
corporations have on hand, and, generally, to make such other
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Federal Reserve Bank of St. Louis
•
Further duty of
said commissioners.
Commissioners are
empowered to
examine officers
of such corporations
upon ath.
If said commissioners
find said
corporation insolvent
they shall pay
apply to a chancellor
ror -in injunction,&c.
shall issue
110Chencellor
notice to cashier
to appear and show
cause, &c.
Chancellor may
appoint a receiver,
&e.
Receiver to give
bonds.
Duties and powers
of receiver.
Receiver to
render an account
to chancellor.
•
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Federal Reserve Bank of St. Louis
4
inquiries as may be necessary to ascertain -he actual
condition of the said corporations, and their ability
to fulfill all the engagements made by them.
That it shall be the duty of the
'Sec. 16.
some one of them, to visit and
or
said commissioners,
inspect the condition and affairs of any monied corporation, more frequently than once in twelve months,
if required so to do, by any one of the monied corporations, subject to the provisions of this act.
That the said commissioner, or
e Sec. 17.
either of them, sht,11 have power to examine upon oath,
all the officers, servants, or agents of said corporations,
or any other person, in relation to the affairs and condition of said corporations, which oath the said commissioners, (or either of them, are personally authorized
to administer.
That if the said commissioners
r Sec. 18.
shall ascertain, from such inspection and examination,
or in any other manner, that any of said cornorations
are insolvent, or shall have violated any of the nrovisions of this act, or acts of incorporation, or of
any otiarr acts, binding on such corporations, the said
commissioners shall, immediately apply to a chancellor,
upon bill or petition, for an injunction against such
corporation, and its officers, and said chancellor shell,
thereupon, issue a notice to the cashier, or to the cashier
and president, of said corporations, to apnear, at a time
and place therein named, and show cause why an injunction
should not issue against such corporation, and its
officers; and if no sufficient cause be shown to the
contrary, he shall, thereupon, issue such injunction
against such corporation and its officers.
That upon the issuing of such in/Sec. 19.
stage of the proceedings thereunon,
in
and
any
junction,
one or more receivers to
may
chancellor
appoint
the
and effects of such corpthe
of
property
take charge
for, and recover the
sue
and
collect,
to
oration -and the property that
due,
be
may
that
debts and demands
shall, in all
who
may belong to such corporation,
of the chancellor;
control
respects, be subject to the
give
bonds
to the treasurer of
and such receivers shall
chancellor,
the
by
fixed
this state, in a sum to be
sufficient
more
or
one
granting the injunction, with
duties,
the
of
discharge
faithful
the
for
sureties,
accounting
due
the
for
and
appointment,
their
or
of his
for all moneys received by them. And such receiver, or
receivers, shall have full power and authority, and it
is hereby made their duty, to sell and convert into
cash, the personal and reel estate of such corporatiens,
and execute good and sufficient titles to the purchasers
thereof, and shall apply the cash, so received, as well
as the money which shall be collected, or in possession
of such corporation, exclusively to the redemption of
the bills and notes, of such corporation, and shall, as
-5-
•
Commissioners
to report to
legislature.
Commissioners
how appointed.
To be under
oath.
•
Fees of said
commissioners.
In case such
corporation exceed the powers
given them, or neglect or refuse to
comply with the
requistons of this
statute, they shall
be injoined, &c.
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Federal Reserve Bank of St. Louis
soon as may be, render an account to such chancellor, of
the condition and affairs of such cornoration, and of his
proceedings in the business of his appointment; and in
case the money so received, shall be insufficient for the
redemption of the bills and notes of such corporation, it
shall be the duty of the receiver or receivers, to pay
over, in further redemption thereof, such sum or sums, as
he or they shall receive from the bank fund before named.
That it shall be the duty of said
,Sec. 20.
commissioners, in the month of October in each year, hereafter to report to the legislature, the manner in which
they have discharged their duties, and to accompany such
report, by such abstracts from the reports made to them,
and by such other statnients as they may deem useful.
That one of said commissioners
Sec. 21.
shall be elected by the joint ballot of both houses of
the legislature, annually, and the other two shall be
elected by the respective corportticas subject to the
each of said
operation of this act, in manner following:
corporations shall choose one delegate, and the delegates
so chosen, shall meet at the court house in Montpelier,
on the third Thursday of October, in each year, and at
the hour of four in the afternoon, shall proceed to vote
for said commissioners, by ballot, each delegate being
entitled to one vote, for every five thousand dollars
actually paid in of the capital stock of the corporation
he renresents, which shall be ascertained by the affadavit
of the president and cashier, and the person receiving a
majority of all the votes so given,shall be deemed duly
appointed,jand the commissioners so chosen, shall be
under oath, for the faithful discharge of their duty, and
shall be entitled to four dollars per day, including all
expenses, to be paid out of the bank fumd, before mentioned.
That if any such monied corporation
Sec. 22.
shall issue, or have outstanding, or in circulation, at any
time, an amount of notes or bills, loaned or put in circulation, as money, exceeding three times its capital stock,
then Paid in, are actually possessed, or shall neglect to
make any annual payment to the treasurer of this state,
required by this act, for the space of three months after
the time when the same ought to have been made, or shall
have lost one half of its canital stock paid in, or shall
have suspended the payment of its bills in specie, for sixty
days, or shall refuse to allow the officers of such corporation to be examined upon oath, by the said commissioners,
in elation to the affairs and condition of such corporation.
every such corporation may be proceeded against, by the
said commissioners and injoined, by a chancellor as an insolvent corporation as herein before provided.
That every officer, agent or clerk,
Sec. 23.
of a monied corporation, who shall make any false
-6-
Officers of such
corporations,
who shall make
false entries,&c.
guilty of felony.
Row punished.
or false entries in the books of such corporation, or
shall exhibit false panel's, with the intent to deceive
said commissioners, as to the condition of said corporation,
shall be deemed guilty of felony, and shall be subjected
to imprisonment in the state prison, for a term not less
than two years, nor more than ten.
That no stockholder of any bank, shall
Sec. 24.
be appointed a commissioner by virtue of this act, nor
No stockholder
shall it be lawful for any commissioner, directly, or
to be appointed
indirectly, to purchase, or in any manner to be concerned
a commissioner.
in any bank stock, in this state.
• That every corporation subject to
/Sec. 25.
Banking corpthe operation of this act, created at tl-)e present session
orations hereafter
of the legislature, or hereafter to be created,:shall,
before it makesEmy loans or discounts, have at least
created to
fifty per cent. of its capitlstock actually naid in,
pay in 50 per cent.
which payment shall be proved on oath, to the satisof capital stock.
faction of the bank commissioners, before any such loans
or discounts shall_be madpand every monied corporation
Monied corporations
whose charter shall behereafter extended, shall,
whose charters shall
within one year after such extension takes effect, pay in
be hereafter extended,
all its capital, to be proved in like manner, to said
shall pay in all
bank commissioners, but every such monied corporation,
ir capital,
(whose charter shall be so, hereafter extended, shall be
hin one year.
permitted to reduce its capital stock, to any sum not
below the amount actually paid in, at the time of the
But said corporations
renewal of its charter.' But such corporation shall,
may reduce their
within one year, from and after the time of such renewal,
capital
file with the treasurer, a certificate, under the seal
stock.
of the corporation, setting forth the sum to which its
capital stock is to be reduced as aforesaid; the filing
of which certificate shall exempt such corporation from
the operation of thisiseCtiOn, and to so much of its
capital stock, as shall be reduced in the manner above
stated.
Sec. 26.
That if any banking company,
Banking corporations
hereafter incorporated, chartered or re-chartered, shall
herearter incornorated, by their act of incorporation, make the private property
not subject to the pro- of the stockholders, holden to redeem the bills by them
visions of this act,
issued, it shall not be required to comply with the
if orivate property
conditions of this act. .
of stockholders
shall be holden,&c.
41/(
Illfsed Nov. '.), 1831.
nk comeissioners
when to be elected.
*See no. 1, sec.15.
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Federal Reserve Bank of St. Louis
No. 2
/ An act, in addition to an act, in relation to the
chartering of banks.
It is hereb-: enacted bthe General Assembly of the
state of Vermont_, That the first election of bank commissioners, to be made on the part of the banks by the
act to which this is in addition, shall be made on the
third Wednesday of "Larch, one thousand eidt hundred and
thirty-two."
From theA Revised Statutes of the State of Vermont.
Chapter SO
Aillefti—:vv.19,18E:1.
- 31 /
This Chapter comprises the law of 1851, with some sliFh'
changes in wording,and with the modifications noted below.
Section 6. Authorized tanner of investlent of ban_: fund, changed to
to invest the sa..,e, and all moneys belonging
read as follows: "
theretoLin a22roved bank stock, or in such other productive or
nationel securities as he may find opportunity, in order th!lt the
same may be a productive and acc,imuletine. fun44
TO Section 9, and later sections.
chancellor.
Court of chancery substituted for
v Section 15. Instead of three commissioners, one is specified as
folloNs:
"One person, to be styled thelbank commissioner' shall be minus—LA.::
appointed by the Senate and House of Representatives, whose duty
it shall be
- Section 21. Omitted, except as to oatil of commissioner, and remuner—
V
ation.
A few sections are divided and renumbered, and the following sections
added.
"Sec. 62. If any director, or other officer of any bank,
or any 2erson interested in, or havirw charge or control
of the same, shall, corruptly -put or cause to be put in
circulation any amount of the bills of such bank beyond
the amount limited and prescribed by its charter, he shall
be confined to hard labor in the state prison for a term
not exceeding ten years.
"Sec. 33. No person shall take or borrow, from any lismk
hereafter chartered or rechartered, any money by reason
of the pledFe of any stock in such bank.
•
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Federal Reserve Bank of St. Louis
"Sec. 34. The stockholders and officers of any bank shall
not, at any one time, be either directly or indirectly
indebted to such bank to a greater amount, in the whole,
than fifteen per cent. of the canital stock of such bank,
actually paid in; and no individual stockholder, or officer
of such bank, shall, at any one time, be indebted to the
same, either directly or indirectly, to a greeter amount
than two thousand dollars; nor shall such stockholder or
officer, either directly or indirectly receive any loan
or discount at such bank, unless he shall procure two good
and sufficient sureties for he same, neither of whom shall
be stockholders or officers of such bank.
-2-
Sec. 35. If any bank shall, directly or indirectly, make
any loan or discount, contrary to the provisions of the
last two sections, such corporation may be oroceeded
against and enjoined by the court of chancery as an
insolvent corporation, as herein before provided.
'"Sec. 36. No bank, hereafter chartered or rechartered,
shall make any loans or discounts until the whole
amount of the capital stock of such corporation shall be
actually paid in, in gold or silver coin, which payment
shall be proved, as nrovided in the twenty eighth
section of this chapter.
"Sec. 37. If any bank, hereafter charter or rechartered,
shall, directly or indirectly, distribute or divided
any portion of its capital stock among the stockholders
of such corporation, before the expiration of its charter,
such bank may be Proceeded against and enjoined as an
insolvent corporation, agreeably to the provisions of
this chapter.
•
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L
Federal Reserve Bank of St. Louis
"Sec.68. The duties and services of the bank committee
shall be confined and limited to such banks only as are
not subject to the visitation and examination of the
bank commissioner, anno 7_nted agreeably to the provisions
of this chapter.
"Sec. 39. The auditor of accounts shall audit the accounts
of the bank commissioner, and draw orders on the state
treasurer for such sum as he shall find justly due, which
the treasurer shall nay out of the bank fund.
"Sec. 40. When a banking corporation may desire to close
its business, before the expiration of the time limited
for its duration, by its charter, the governor, on
application of such corporation, may issue his proclamation, designating some day for the termination of
the existence of such corporation, which day shall be,
at least, six months after the issuing of such proclamation;
and such corporation, on the day thus designated, shall
cease to exist, as fully and with the same effect as if
its charter had expired by the limitation theretin
contained.
'"Sec. 41. The governor shall not issue such proclamation
unless it shall be made to ap)ear that two thirds of
the legal votes of the stockholders shall have been
given in favor of such application.
LAWS OF VERMONT, 1840
Part I.
/Section 1. Any banking company, chartered or re-chartered at
the present session, or any future session, shall be subject to theprovisions of this act, and to the control, at all times) of the legislature,
to alter, ameno, or repeal) as the public good may require; and shall be
subject to the provisions of the first twenty-seven, and the fortieth and
forty-first sections of the eightieth chapter of the Revised Statutes; but
shall not be subject to the remaining sections of said eightieth chapter,
except so far as the same are re-enacted in this act. Provided, that no
such corporation shall be bound to contribute for the payment of losses
which shall have accrued previous to their act of incorporation or rechatter, by the failure of any safety-fund bank.
Sect. 2. No such banking company, incorporated as mentioned in
the preceding section, shall make any loans or discounts, or issue any
bills for circulation, until at least one half of its capital stock shall
have been paid into the bank in gold or silver, and permanently deposited
for the use of such bank; nor until the amount shall have been ascertained
and the certificate thereof deposited with the treasurer of the state, as
provided in the succeeding section; and no such bank shall continue to
make loans or discounts for a longer space than two years after commending
business under such act of incorporation, unless the the whole of the capital Aock allowed in the charter shall have bcen paid in, subject to the
provisions of the succeeding section.
-/Sect. 3. The commissioner appointed according to the provisions of the eightieth chapter of the Revised Statutes, shall, on the application of such banking company, examine the amount paid for capital
stock, and ascertain by the oaths of a majority of the directors, that
such money has been paid in by the stockholders toward the payment of their
shares, and not for any other purpose; and that it is intended that the
same shall remain in said bank as a part of its capital stock, and the said
commissioner shall make a certificate thereof to the treasurer of the state.
Sect. 4. No such banking corporation, re-chartered as mentioned in the first section, shall continue in operation, or take any
benefit by reason of such re-charter, unless such corporation shell have
remaining in such bank, or shall cause to be paid into such bank for capital, funds which shall be available at the time, to the full amount of the
capital stock which shall have been paid in, under its original charter,
and the amount ascertained, and the certificate thereof deposited with the
treasurer according to the provisions of the preceding section.
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Federal Reserve Bank of St. Louis
2
'Sect. 5. Every such bank, whose charter shall be extended, shall,
within one year after such extension takes effect, pay in all its capital,
to be ascertained and certifie6 in the manner provided in the third section; provided that such corporation may reduce its capital stock to any
sum not below the amount actually paid in at the time of the renewal of
its charter, and may, within one year from the time of its renewal, file
with the treasurer of the state a certificate under the seal of the corporation, setting forth the sum to which the capital stock is to be reduced;
and the sum so certified, after the filing of such certificate, shall be
taken to be the amount of the capital stock of such bank.
/Sect. 6. No pert of the capital stock of any bank shall, at any
time, during the period, for which it is authorised to continue its banking operations, be withdrawn from such bank.
•
/ Sect. 7. The stock, property, and concerns, of every such bank,
shall be managed and conducted by directors to such number and appointed
in such manner, as the act of incorporation shall direct, who shall be
stockholders and inhabitants of the state, and shall hold their offices
until others are appointed and qualified to act; and a majority of the
directors shall be required to constitute a quorum.
"Sect. 8. The directors of any such bank shall be liable to pay
to the creditors and stockholoers of such bank, all losses which may be
sustained in consequence of any violation, by them, of the provisions of
this act, or of any other law, or other unfaithfulness in the discharge
of their official duties; and any number of such directors may be sued in
the same action by any claimant under the provisions of this section.
Sect. 9. Further to secure the liabilities mentioned in the
eighth section, each of the directors shall execute a bond to the treasurer
of the state, in an equal amount, the aggregate amount of which bonds shall
be equal to the amount of the capital stock actually paid in, with a condition for the payment and discharge of the liabilities mentioned in said
eighth section; and such bonds shall be secured by one or more sufficient
sureties, residing in this state and not directors, or by sufficient mortgage of real estate, to be examined and approved by the said commissioner
and such bonds shall be for the security, and may be prosecuted for the
benefit of any claimants under the provisions of the eighth section.
'Sect. 10. No director shall enter upon, or discharge any of
the duties of his office, nor shall the bank go into operation, until
such bonds have been executed and approved, as mentioned in the preceding
section.
•
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Federal Reserve Bank of St. Louis
- 5 -
Sect. 11. Any director, who may have paid more than his share
of the liabilties mentioned in the preceding sections, may have any of
the proper action, in law or equity, against such other directors as
shall not have paid their full shares.
'Sect. 12. The directors, after being qualified to act as such,
in the manner required by law, may appoint one of their number to be
president of such bank; and may appoint and remove, at pleasure, a
cashier, and all other necessary officers and servants, and fix their
comaansation; and may make all necessary by-laws and regulations, not
incoasistent with the act of incorporation, or the laws of this state,
to regulate: --
S
1.
The conduct and duties of the several officers;
2.
The times and places of holding, and the manner of notifying the meetings of the directors and of the corporation;
3.
The terms and conditions on which all loans and discounts
shall be made, and other negotiations of the corporation
shall be transacted;
4.
The disposition of Lhe stock, property, and effects, of
said corporation;
5. The election of directors and filling vacancies in that
office;
And all other regulations necessary for the proper management
of the business of the bank, and to carry into effect the
purposes of its incorporation.
Sect. 13. The cashier of the bank shall be required, before he
enters upon the duties of his office, to give a bond to the treasurer
of this state, with sufficient sureties, to be approved by the bank commissioner, in the sum of not less than twenty thousand dollars, conditioned for the faithful discharge of the duties of his office, which
shall be for the security, and may be prosecuted for the benefit, not
only of the corporation, but of all others interested.
Sect. 14. Any such bank may loan and negotiate its moneys and
effects, by discounting on banking principles, upon such security as
the directors shall deem expedient; and dividends of the profits of
the bank may be made by the directors every six months.
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Federal Reserve Bank of St. Louis
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Sect. 15. Such corporation shall not receive or demand any
greater interest or discount, on any note, draft, or security, than
at the rate oi six per cent, per annum; but such interest or discount
may be calculated arid taken according to the established rules of
banking.
Sect. 16. No such corporation shall, directly or indirectly,
employ its money in trade or commerce, or deal or trade in buying or
selling any goods, chattels, wares, or merchandize; provided that such
corporation may sell all kinds of property which shall come into its
possession in the ordinary collection of its debts.
110
Sect. 17. No stockholder, director, or other officer, shall at
any time, be, either directly or indirectly, indebted to the bank, in
a greater amount thrt five per cent, of the capital stock actually paid
in; nor shall any individual, company or corporation other than such
stockholder, director or other officer, be at any one time indebted to
any bank in a greater amount than the sum of ten per cent, of the capital stock so paid in, except for deposits made by such bank for the
purpose of redeeming their bills at the place of such redemption, or
on the ourchase of bills of exchange;'and all the directors and other
officers shall not, at any one time, be directly or indirectly, indebted
to the bank, to a greater amount than the aggregate amount of three per
cent. of such capital stock, for each director.
'Sect. 18. No such bank shall issue bills, or otherwise contract
debts, to a greater amount than the amount of the deposits, and twice
the amount of the capital stock actually paid in; but the violation of
this provision shall not avoid a4 contract, or be construed to prevent
the collection of any debt, contracted by such bank.
Sect. 19. All the bills and notes of such bank shall be deemed
to be payable at such bank, and shall at all times be received by said
bank, on all judgments, executions, or demands, Tade payable to, or the
property of, such bank.
'Sect. 20. If the officers of any such bank shall refuse or delay
payment, in gold or silver money, of any bill or note of such bank, presented for payment in their usual hours of business, the said tank shall
be liable to pay the holder of such bill or note, as daliaLes, at the
rate of twelve per cent, a year, for the time during which such payment
shall be refused or delayed.
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Federal Reserve Bank of St. Louis
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Sect. 21. At any time, within two years from the time any such
bank may be Incorporated or recharted, such corporation shall be required, when requested by the legislature, to loan to this state any
sum of money which may be so requested, to be repaid in three annual
installments, or sooner, at the election of the state, with annual
interest; provided, that the whole amount due to such bank from the state,
for such loans, at any one time, shall not exceed five thousand dollar
s;
provided also, that such corporation shall not be required to make
such
loan, when it shall be
violation of the provisions of the eighteenth
section of this act.
• Sect. 22. No loan shall be made, or any bill or note discounted,
without the consent of a majority of the directors.
'Sect. 25. No bank shall issue bills of a less denomination
than
one dollar, or bills which contain fractional carts of a dollar
, under
penalty of one hundred dollars, payable to the treasurer of state,
which
may be ecovered of such bank, in an action of debt, in the name
of said
treasurer.
•
' Sect. 24. All such banking corporations shall semi-a
nnually, at
the times at which the directors shall usually declare
the dividends of
the profits of such bank, pay into the treasury of this
state one per
cent, of the capital stock actually paid in, as a
tax upon the income
of euch bank; provided, that if the directors shall keep
a sufficient
deposit of funds in the city of Boston in the Common
wealth of Massachusetts, and shall at that city uniformly cause their bills
eo be redeemed
at par, such corporation shall be exempt from such paymen
t; but if they
shall fail so to redeem their bills for the period of
ten days in the
whole, in any one year, the said tax shall be paid for
that year.
Sect. 25. The directors of any bank shall not loan
or pay out
any money, or allow the same to be loaned or paid
out on the pledge of
any stock in such bank.
Sect. 264 The real estate, which it shall be lawful for
any such
bank to hold, shall be only such as shall be needed
for the accomodation
of said bank, in the transaction of its busine
es, such as shall have
been mortgaged to it, by way of ,security, or
conveyed to it in pay*ent
of debts previously contracted, or set off on
execution in satisfaction
of the debts of such bank.
Sect. 27. Each stockholner shall be entitled to a
number of
votes, proportioned to the number of shares which may
have been held
by such stockholder, at least three months before the
time of voting,
according to the following rats, -- one vote for each
share not exceed-
•
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Federal Reserve Bank of St. Louis
6
ing four; five notes for six shares, six votes for eight shares, and
seven votes for ten shares, one vote for every five shares above ten;
provided that no stockholder shall be entitled to more than twenty
votes; and Absent stockholders may vote by proxy, authorized in writing; but no stockholder residing out of the state shall be entitled to
vote , in any way, in the meetings of the corporation, nor shall any
stockholder be entitled to more votes in his own right and by proxy
than one fourth of all the votes given.
•
/Sect. 28. The directors may determine at what times, and in
what proportion, the stockholders shall pay into the bank the amount
unpaid on their shares of the capital stock; and they shall give notice
thereof, by publishing their order, three weeKs successively, in some
one or more of the news )
- apers printed in the county, where the bank is
located; or if no newspaper shall at the time, be printed in such county
in one or more newspapers in an adjoining county, which shall most generally circulate in the vicinity of such bank; the last of which publications shall be at least thirty days before the time appointed for such
payment; and if any stockholder shall neglect to make payment on any
share, according to such order, for the period of thirty days from the
time appointed for such payment, such share and all the moneys previously paid thereon, and all dividends accruing or due thereon, shall be
forfeited to the use of such corporation.
Sect. 2. If, by any means, the capital stock of any such
bank shall be reduced, the amount of five per cent. below the amount
which shall have been paid into the bank, it shall be the duty of the
directors, immediately to raise the amount of the deficiency, by assess,Lents on the several shares, in the manner and subject to all the regulations provided in the preceding section, and the stockholders shall
be subject to the liabilities, and the shares to the forf,Ature provided in that section; and the amount so raised shall be held and deemed
a part of the capital stock, within the meaning of this act.
Sect. 30. If the bank commissioner, on examiiation, shall ascertain, that any of the capital stock of any bank shall
have been lost,
as provided in the preceding section, he may make an order, requiring
the directors, within a time to be fixed by him, to raise the amount of
the deficiency, as provided in the preceding section, and give written
notice of such order to the president or cashier of such bank;
and if
the directors shall neglect to raise such amount within the time limited,
such corporation may be proceeded against, by such commissioner, and enjoined by the court of chancery, as an insolvent corporation, as
provided
in the eightieth chapter of the Revised Statutes.
I
•
Sect. 31. If any such bank shall, directly or indirectly, made
any loan or discount contiary to the provisions of this act, or if
any
such bank shall directly or indirectly, distribute or divide any portion
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Federal Reserve Bank of St. Louis
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of its capital stock, among the stockholders of such corporation before
the expiration of its charter, such bank may be proceeded against and
enjoined as an insolvent corporation, as provided in the eightieth chapter of the Revised Statutes.
Sect. 32. If any director or other officer of any bank, or
any person interested in or having charge or control of the same, shall,
corruptly or by design, put or cause to be put in circulation any amount
of the bills of such bank, beyond the amount limited and prescribed by
this act, he shall, on conviction thereof, be confined to hard labor in
the state prison for a period not exceeding ten years.
Sect. 55. If any director or other officer, or any person interested in or having charge or control of the same, shall wilfully or
corruptly loan or pay any money, or cause the same to be loaned or paid
to any director or other officer or stockholder, or individual or company
or corporation, or discount or cause to be discounted any bill, note or
other obligation or security, for any such director, or officer, or stockholder, or individual, or company or corporation, so that such director,
officer, or stockholder, individual, or company or corporation, shall
thereby become indebted to such bank to a greater amount than is allowed
by the seventeenth section of this act, th0 person so offending shall,
on conviction thereof, be confined to hard labor in the state prison for
a period not exceeding five years.
KSect. 54. The shares in any such bank shall be transferable
in such manner as may be provided in the act of incorporation, or by the
by-laws; but no transfer shall be valid until recorded in a book kept in
said bank for that purpose, nor until the person making such transfer
shall have discharged all the liabilities due from him to such corporation.
Sect. 35. All acts, incorporating banking companies, are declared to be public acts, and shall be construed in all courts and places
benignly and favorably for every beneficial purpose therein mentioned.
' Sect. 56. The bank commissioner is authorized to visit and
inspect the condition and affairs of any banking corporation, at any time,
on the application of any creditor or stockholder, if he shall judge the
interest of the creditors or stockholders shall require it.
Sect. 37. The auditor of accounts shall audit the accounts of
the bank commissioner, and draw orders on the state treasurer, for sucja
sum as he shall find justly dur, which the treasurer shall pay out of
the bank fund.
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Federal Reserve Bank of St. Louis
•
- 8 --
Sect. 38. All hom:.s, taken according to the provisions of
this act, may be put in suit on the application of the receiver appointed by the court of chancery, as drovided in the eightieth chapter of
the Revised Statutes, or by order of the bank commissioner; and the avails of all such bonds shall be applied in the same manner, as provided
in the twenty-first section of the eightieth chapter of the Revised Statutes, until the debts of such bank shall be satisfied; and the balance,
if any, shall be returned to the directors, from whom the same was collected, respectively.
Sect. 39. If the directors of any banking corporation subject
to the provisions of this chapter, shall execute bonds to the treasurer
of the state to the amount and with the security required in the ninth
section of this act, to be approved by the bank commissioner, and deposited with said treasurer, conditioned that such directors shall at
all times pay and redeem, according to law, all the bills issued by
such bank, and shall pay and refund all deposits made in such bank,
when such Ayments are demanded, while such directors are in office,
such bank shall thereafter be exempt from all payments required in the
eightieth chapter of the Revised Statutes, to the bank fund, and from
all the provisions of the establishment, preservation and regulation of
said fund; and in such case, the bond required in this act to be given
by the cashier, shall be given and made payable to such corporation; provided in such case, such bank shall pay the bank commissioner, out
of its own funds, for his services in making the examination required
by law.
'Sect. 40. It shall be the duty of the bank commissioner, annually, or oftener, to examine the condition of the :2onds required by
this act to be given by the directors; and he may require the same to
be renewed, with additional security, Nithin such time as he may prescribe; and if the directors shall neglect to furnish security in the
manner and by the time prescribed by the commissioner, and if the commissioner shall deem the security of the bonds insufficient, such bank
may be proceeded against by such commissioner, and enjoined by the
court of chancery as an insolvent corporation, as provided in the eightieth chapter of the Revised Statutes,
Approved, Oct. 28, 1840.
•
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Federal Reserve Bank of St. Louis
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Lesolvod, by the 6ftaste and house of Aepreseatatives, That the Secretary of Stste be directed to cause to be publisheo 1:th the Laws, as
an Appeudix, the 'pill to euthorize the business of :anking.
Adopted by the to houses, hovesber 15, 1649.
jra isuthorise Iba SusisesC
ett.241,2&
It is here,' edactea by the Uederal Assembly of the ;Aate of Ver.ont,
an follotis;
section 1. The Treasurer of the state is hereby eathorised und resuiLea to cause to be escraved end ?rioted in the best tilruner to guard
Against counterfeiting, such quantity of circulating notes in the similitude of bare: notes La blenk, of the different denominatioas suthorised
to be issued by the incorporated banks of this State, as be mey frost time
to time dee;i1 neceee.r, to carry into effect the drov'..sions of tAs act,
and of such form a he mey prescribe. 84ch blans circulating notes shall
be countersigned, numbered and registered in proper books o be provided
and kept for that purpose, in the of,-ice of said treasurer, under his
Jirection, by su;:h person or persons -s the said treasurer sh,t11 uppoint
cor that porpose, so tht each deelominstion of such circuit:U:1g notes
shall bear the unifora si,nature of such reister, or one of such registers.
Section '4. Zhenever asy person or associatiaa of persons, forced
for the purpose of b-akiug under the provisions of this act, shall lawfully trans:er ta the said treasurer sny portion of the pUbliu stow( issued, or to be issued, by the United :States, the Stete of Massachusetts,
Moe York, or Maine, such person, or essociation of persons, ahail be entitled to receive from the said treasurer, an equal amount of such circulating nots, of tfferent denosinatiJne, registered and countersigned as
aforesaid; ,ut such ?Ohne stoce shall in all cases be, or be made to be,
equel to a stock producing six der cent. yer annuI; wiz' it shali not be
lawful for the treasurer to taxe such stock A a rate shove its per value,
nor (Above itz current market value.
.:ci....tion ,f persons, are 1-:.ereby authSection 6. Such person or u6s.
orised, after 'silting executed -ad signeu. such circulating notes in the
manner reouired by laN, to make them oolig_tory promi,:sory notes payable
on demand, at the place of business within this State, of such person or
,ssociation, to ioa sad circulate the same an mosey, according to the
ordinary course of benking busluese, as regulated bi the laws arta usages
of this State.
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Federal Reserve Bank of St. Louis
Section 4. In case the maker or makers of say socS circulating
at any
note or notes, coontereigaed and registered as eforeseid, shall
s,
of
busines
hours
usual
the
dariag
demond,
time herefter, on laeful
such
where
?lace
the
at
,
o'cloce
eet.eeu the houro of ten and three
such note in
note or notea is or are osisble, fail or refuse to redeem
note or notes,
such
of
holder
the lawfol money of the United Stet's, the
non-pant
for
eprotest
be
to
saking such demand, say cause the same
and
(inner;
usuel
the
in
seal,
by a notary public, under his officio'
shall
,
protest
sueh
office
his
the treasurer, on receivine and filing in
or
note
saoh
of
eskers
or
forthelto give n,tioe in writing, to the maeer
ten
for
to,
Uo
to
omit
shall
notes, to pay tee sass; and if he or they
(Undmys after such notice, the treasorer shall immedietely thereuoon,
ag.,last
defence
legal
and
good
a
less he shall be saticied that there is
ting
the payment of such note or notes,) give notice that all the cireule
the
of
out
d
redemoe
be
1111
tioa„
notes issued by such per:sou or essocia
given
be
shell
notice
which
,
foroose
trust rued& in his heads for that
the
bo odblishing the se in solve newsoeoer orieteo in the count, Ahere
there
case
in
or
shed,
Is
estarli
tion
ossocia
business of such person or
ed
is no newspaper )rioted in such county, such notice shall be oublieh
rebe
er
shall
treasur
the
end
ier;
Montpel
at
in some newedayer orinteo
44r00 to apoiy the said trust funds, belongint to the maker or meters
of such protested note or motes, to j,ee eiyment pro rata of ail such
circulatAlg notes, liether protested or not, out in circulution by the
maker or makers of such orotested note or notes, oursuant to the provisions of this ect, and to odopt elch measures for the osyment of such
notes us will in his ooinion most effectually prevent loss to the holders
thereof.
St.ction 5. The treasurer may give to any person or ossociation of
persons, so transferrno stock, in o,rsuence of the orovisions of this
wh:
act, powers of attorney to receive interest or difidends thereon,
'
use;
such person or associ.Aion way receive and app4 to their own
to
f.ilin
such power may be revoked upon such person or association
redeem the circulating notes so issoed, or oheaever in the onion of
the treasurer the orincioel of such stock sholl become ea ousuffieleot
aecurity; ana the said treasurer, Ufal apolication of the ceour or onera of Lie: traosferred stoce in trust, may, in his aiscretion, chooge
in
or transfer the sae for other stocks of the kinds ber:re specified
tne
of
,
this act, or may transfer the said stocks or any ;.art thereof
mortgages, or any of them hereinafter mentioned and orovided for, uoon
cztacellini n equal smount of such circulatoc notes
receiving
delivered :4 him to such person or association in such meaner that the
ciroolating notes sholl always be secured in :all, either by stocks,
or by stooka arc. xartoges, as in tAs ac 7 provided.
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Federal Reserve Bank of St. Louis
Section S. The bills or noLes so to be couotereigned, and the oaymeat of which shall be so secured by the tronsfer of oublic stoeks, shall
be stamped on their face, "securoob. the ?ledge of oUblic stooks.*
Section 7. inetea.. of trunsferting dOblic stoc.s as aforesaie, to
secure the .hole amount of such bills or notes, it shaLl be lawful tor
sch person or ossociation of persons, ia cese they shall SJ elect, before receiviog ony of the said bills or naLes, to secure the osymaut of
one oalf of the whole amount so to be issoso, by transferring to the
treasarer bonds; and mortgages u000 real estate beoring at least six oer
cot. iaterest ooiable aanually or somi-aoaually, in which csse 617 - rsons,
bills or notes losued by the saio person or association of
shall be stamped on their face, "secured by the pledge of pablic stoces
and real estate."
Section c. The real estate so mortgaged, must be laorovtd, oradoctive, _nincumbered lands in this State, exclusive of any buildings
thereon, ond the am000t for shich said Lanus are so mortgaged must not
exceed to fifths of the velue of saia lands; nor shall any eortgeoe be
received for a greater amount than five tooJsand dollars eech, ond the
treasurer shall prescribe such reguiatioos for ascertaining the title
and value of such leads, as he may sumo necessary, end such bonds seen
be payable within such time as the treasurer aoy direct.
Section 4. The treasurer may, in his discretion, re-assign the
suid bonds and mortgages, Jr any of them, to the oereon or sseociation
eho oronsferred the Raze, on receiving other approved bonds and mortgages of equal amount; awl *hez:, flny sum of the principal of the bonds
and mortgages traosi'erred to the treaourer hall be p,ia to Ilia, he
shali notlfo Lhe person 3: i-anociution that trausferre the bonds and
mortgeoes, of such oaoment, and may oey the SWIM to such person or a550ciation, on receiving other approved bonds and mortgoges of equal aaoant.
Section 10. The person or ossocietion ol oersoos, assigning such
bonds and mortgages to the treasurer, msy roceioe the annual interest f
to ooze thereon, unless default shall be mooe in oeoiog the tIlis or
notes to be counters4aed as aforesaid, or unless, in theopinion of
the treasurer, the bonds and mortgages, or stocks oo pledged, shell become &n insufficient secority for the psymeat of such bills or notes.
Section 11. In case such person or assooietiou of peroons, shull
fail or refuse to pay ouch bilis or notes, on dou.nd, in the oeteler
specified IA toe fourth section of this act, the treasurer, fter the
et
ten ueys notice therein mentioned, say proceed to sell at 2ub1L
the public stocks so pledged, or the bons and aortoages so assigned, or
any or either of then, and out of the oroceeds of such sale sha21 ,•
and caocel the said bills or notes, default in pAying ehic., shall to.:
been sole 84 aforesaid; but nothing in this act c..;ntaned sh-11 be con-
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Federal Reserve Bank of St. Louis
sidered as LLAying atly pledhe on the hert of the State for '
of said bills or notes, beyoed the proher application of te
pledged to the treasurer for their redemption.
Section lh. The public stocks aed hoods end mortgagee to be depoeited with the treereurer, by eny such person or associetion shall be held
by him exclusively for the redemption of the bills or notes of such person or eesocietioa, it in circulation !IC money, antil the same are paid.
hection 15. The plates, dies tele eeterIels to be proeured by the
treasurer, for the printing and eaking of the circuletieg notes provided
for hereby, 'sheli remain in his custe4, aue under his a_rection; the
exheesee necessarily incurred in executing the provisions of this act,
shell be ?aid by the treasurer out of spy mcneys In the treeeary not
othemiee aphroprieted; and or ere purpose of reimbursing the seme„ the
sett treasurer is hereby authorized and required to charge e„ainst, and
receive froe such person or ..esocietion, applying for such circelatine
notes, such rate per cent, thereon as way be sufficient for that purpose
erre es eey be just Lad reusoeable.
Section 14. It shall not be lawful tor the treesurer, or other officer, to countersign bills, or netes, for any person or association of persons, to an amount in the ehhrehete exceeding the publie stooks, or heblic stocks and bonds and mortgahes, at their value, as before previeed
in this eet, deoosited eith the treaeurer by such oersoa or ussociatIon,
and any treasurer, Dr other officer, who shall violate the hrovisions of
this sectien shall, uhon conviction, be djudged guilty of a misdemeenor
aryl hall be punished by a find not less than five thousand eollers, or
be imorisened not less than five years in the State -':-n, -r hh
such find and impreonment.
Section 16. iehe number of hersons my essociete Le
,41Lh_es
of discount, eepoeit and circulation, uhee the terms and c:nditionF. • 1
subject to the liabilities, prescribed in this act; but the aree
amoent of the ca2.tal stock of any such hssociation shall not be less
than fifty thousand aolla:s, nor more than two hundred and fifty thousand eollers.
Section 16. Sueh persons, under their winds an seels, shell make
a certifiAxte ehich shall specify: -- 1. The nese assumed to distinguish rach associetion, end to be used in its dealinhe. 2. The place
where the operetions of eiscount and deposit of such eesocihtion are to
be carried on, desihnating the particular city, town, or village. 3.
The eoent of ceoitel stock of such association, enc the number of
shares into rhich the same shall be divided. 4. The names and pieces
of residence of the shareholders, end the numeer of shares held by each
of then reshectivelh. 5. The period at whih zech association ahall
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Federal Reserve Bank of St. Louis
-5-
commence and terminate; which certificate shall be ackuewledeed aad
recorded in the ofAxe of the clerk of the county where egy office of
such aesocietion shall be esteelished, and e eopy thereof filed in the
office of the Secretary of state.
ection 17. The certificete, reeeireu oy tee last ereceeiug secUon to be recorded and filed in the office of the elerk of the count.,
and Secretary of 6tete aforeseld or coeies teereol, dal)
. certifiec by
either of those officere, way be used es evidence in ell eourts aaa
laces, for ead against ane such aseocietion.
section 18. Ali heneing associations, Or ineivieual beaetle, ergenized uneer the provisions of
is act, seeli be beaks of discount
and deposit as ,ell es of circulation, and sell nave power t ceiry
on the 0.1306:: Or banking, by discoeeting eills, notes, and other
ovieeeces of uebt; by receiving deposits, be buelag and selling gold
an. 3i1VT bullion, foreign coin ax u bills of exchange, in the meaner
aeecfled in teeic article of associetiea, for the ;,t;y0sfits euthori7106 by tele act; by loaelae aoney ...ta real ane eersoael zecerley; ond
by exercising each incidental poers 4c shall be aecessain to carry on
such business; to choose one of their °umber as ,;resident of saeh easo
Aation, end t) e)point a caehler, ane sech other officers end egenta
their beainese. may reeuire, and to remove such president, cashier,
offizers and eeeets et ?lee ire, and to apeoint others in their ?lace.
and the asual basiaess Or banking of said association Jr iaeividaal
banker, shell be treasactee et the piece where such bureaug usaoclution
1 3 the locetion specior ineividual baker ehall be loceted, agreeable .
certificate
be
made
by
the
second clause ef the
directee
to
fied ia the
sixteenth section of this act, arid not elsewhere.
Sect,ion la. The silares of said associatioe shall be ilea:nee personal ,:roperty, and shall be er, eeferable on the boots of the association, in such manner as obi be ce,reed on in the articles of association;
anu every person becoming a shareholder by such treaufer, eLail, in
eroeortion to his shares, succeed to all the riette axle lienilities e:
)rior shereholders; and no change sh,11 be mede in the artieles ef
sociation, by zhich the rights, remedies, er eecarities of its =Lab,. ing creditors shall be weateeed or impaired. Such ussecietion ehell
shall not be dissolved be the death or insanity of any of the ahareholeers terein.
Section 40. It shall he lawful for any aseocietion of persons, :rgani,r,O under the erovisions of this act, by their erticlea of aseceietion, to .e-ovide for an incre,se of their capital, anu of the number of
their azsocietee, from time to time as they zee,* think proeer, the aregate capitel not to exeeed two 11.ndeed ana fifty thouseud collert..., es
beeere erevined.
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Federal Reserve Bank of St. Louis
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-
associatioa, and all notes ano
Sec. 21. Contracts aade by any such
n as money, shall be siaaed by
bills by them issued and .axt in circulatio
thereof; and all suits, acthe president or vice president, and cashier
by or on behalf of such astions and proceedings, broaght or prosecuted
naae of such association.
sooiatiou, may be Drought or _,rosecuted in the
such association,
Sec. 22. All persoas having demands against alai
the nature of the
to
::.ay maintain actions at law or in .quit', according
ents and dejudga
all
and
case, against such association by their name;
debt or liany
fol
n,
iatio
crees obtalaed or rendered against such assoc
joint
the
st
again
only
ced
ability of such association, shell be enfor
to be
e
liabl
be
shall
rty
property of the association, and which prope
e.
or
decre
ent
jaagm
such
taken aua sold by execution aixier any
n onall be lieble in
Sec. 28. No shareholoer of any s-ch associatio
or eaaaacaeat of such
his individual caaacity„ for any contract, debt,
'11
hia sianeo shell
by
n
iatio
assoc
of
association, unless the articles
liable.
aeclared that the shareholders shall be so
association to purchase hold
Sec. 24. It shall be lawful for such
aurposess 1. Such as shall be
and convey real estate for the folloaing
on in the convenient transaction
necessary for its issaediate accomoaati
be morteagea to it lo good faith,
of its business; or, 2d, such as shall
s due to, such associatioa;
ay way or security for loans made by, or money
in satisfection of debts previor, Sid, such as shell be conveyed to it
deelinas; or 4th, each hs it shall
ously contracted„ in the course of its
ciation shall not purchase,
.Lcaaire by .my of execution. The said &asso
or for aoy other ouraose;
cesu,
other
hold, or convey real estAe, ia amp,
%lade in the name of the
be
shall
e
and all conveyances of s.ch real estat
association.
or shareholders of any
Sec. 25. Upon the aa)lication of creaitors,
amount to one thousand
such association, whose debts or shares shall
-vit, a chancellor mey, in
dollars, and stating facts, vrified by affid
ster of
a to be made by a
his discretion, order a strict examiaatio
iation, for the .araoae of aschancery, of all the affairs of such assoc
the prudence of its mancertairaLng the safety of its investaeats, and
a, toaetaer *ith the
agement; and the result of ever, Bach exealoatio
thereon, shall be published
opinion or the aaster and of the chancellor
t, who shall aaxe such order
suce manner as the chancellor shall direc
a and aablication„ ass he may
in respect to the expense of such examinatio
deem proper.
caaital of toy such associSec. Lb. If any portion of the original
whatever, whilst any debts of
ation shall be withdrawn for Key purpose
ed, no dividends or profits on the
the association shall remain unit:tie:l
u shall thereafter be made,
shares of the cia:ital stock of the associatio
all have been sad* good, either by subuntil the deficit of caa.tal
subsequeutly accruing proscriotioa of the shareholoers, or out of the
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fits of the aseociation; and if it shall appear teet an.
have been eeie, it shall be the duty of a chancellor, on
any persaa in iuterest, to ILAWID the necessary orders and
losing he effuirs of the aseociation, and distributing
and cf:ects among its creditors and shereholders.
s.e:h eevi-eans
applieutien of
oecrees i r
its erueerty
See. ,7. Such ussoeletioe shell be liaele to ay th eoleer ef
every bill or note, put In circulation as money, the eeeeet of weieh
shall have been demendee ene re:ueed, damages ::or non-esymeat thereof,
in lieu of interest, at eat; after the rate of thelve eer cent. _er
enaum, from the time of such refustel, antil the eeyment of such evidence of debt end the damages thereon.
Sec. ZS. The presieent era: eshier of every ussocietion formed
pursuant to the :revisions 4f this act, smell at all times keep a true
and correct Last of the names of all the shareholders of such association, eed seal.: file c cony of such list in the o:Tice of the clerk of
the county, where eay office of such association may be loeeteu, and,
elso in the office of the treasurer, on tee first kondays of Jenexy
and JAI in every year.
Sec. 2. It shall net be lawful for aay association foreed under
tee provisions of this act, to mate any of its bills or notes to be put
in circulation as money, payable at epy other elece than at the office
where the business of the aseeciation is cerried on and uoaeacted, and
said bills or notes 42011 be made double on demand, end • ithoat interest.
Sec. SO. thenever the securities depositeu for the redemption of
circulating eetes shall, in the o.,inion of the treaeurer, become insufficient for that eurpose, ec may re.:eive the dividends on all stoces,
as well es the interest on bonus ana mortgagei:, ano shall deposit the
same ia some eefe beal or bankine association in this State, in his
name, in trust for the associttion, or bencer to whom the same may belongs the „eposit to be made on such terms and at suce rate of interest be tile trea.e4rer mey deem most coeicive to the interest of such association or benker, and to be witedrewn and paid over, whenever, in
the opinion of the treesurer, the securities of such eseocietion or
bunter shall ee sufficient to warrant it.
Sec. 51. The I) nes eau lorte eee,: eentioned La this act, for securt e circulating bills ee notes, may be eede or exe ing the eeyeent
tee to the treasurer.
6ec. te. all fees for protesting the circulating notes issued by
any beatini association or iedividual bemicer, shall be ?aid by the person procur:ne the serviees to be perfermed, for Ahich such association
or beneer shell be liable, but no pert of the seclrities depositee by
such association or banker shall be applied to the payment of such fees.
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Sec. 55. It shell be the duty of the bank coaaissiouer, at least
once a year, and oftener if he shall dsea it nece:asary, to inspect every
cant eatabliaae- anaer the provisions of this act, and report to the
State auditor: let. The amount of the certified atock of the capital
stoct of the banking aseociation, or individual banker, paid in or investeu accordina to law, or in autsuance of its articles of association.
and the aamant of saeh stock ab then ooseessout kd. The value of the
real estate of he association, or indiviauel banker, no specifying
what oortion is occuoied by the assoai.tioo, or Leiviaual beaker, for
the trasnaction of basinesat 5d. The shares or stock oeld bysuch association or apaiviOual banter, whether ahaolacaly, or ai collateral eftcarita, specifing each kind ala ...lescri,a.ion or stock ...nd the number and
value of the shares of each: 4th. The oebte wiala to the association,
or inaiviaual beaker, eoecifyina s.ch as are oue from moneyed or other
eorporations, or associetions, the names of such corporation, or asaociatious, and the amount due froi ecb, am; also s?ecifyin‘ the &mount
secured by bond and mortgage, the amount ehich ought to be iocluded in
the computation .X loses, and the tatal amount of debts then collectable: 5th. The amount of debts celiac Cy the association, or inctivioual
beater, soecifying such as are dayaele on deaand, and such as are due to
moneyed or other corpotations, associations or inaivioAel banters, the
names of ouch corporations or associations, or individual bunkers, ano
the ewount due to each: 6th. The amount of claias aga:nat the association, or loaividual banker, not eceaowledgeo by it or him as debts: 7th.
The amount for which the association or inoividual banter is bound as
sarety, or for which it may become liable on the bmppenang of contingent
events: ath. The &want of the notes or bills then in circulation of
said associ,!lon or inalviaael banker, of loans and discounts, and specie on hands Ah. The amount of losses of the essociation or individaal banker (if ally) charged, specifying ahether ch rged on its or his
capital or arofits, siuce the last ireceding stateaent, ana of the dividends declared and made during the 84M0 period. 10th. The amount of
real eatute, mortgages, and of stoces, toother with a uescription of
soon stoetu aepoaited by each aasocl_tion or inoividual banter, -ith the
treheurer as eecurity for the circolataog notes issueu; the market value
of said stoaee, .8 near as the same cau be ascertained, and the date to
which oayeeut of interest has been made upon real estate, mortgages and
stocks, and whether said interest has been ;id to such banking association or locavidual banter, or ,assed to tneir or his crecit on the books
of theAreasurer.
Sec. 54. In case any of the said associations or iooiviaual banters shall refuse to submit its books, "per& ano concerns to the ineoectioa of said aomaissioner, or whose officers shall refuse to submit to
oe examined on oath, totalling the concerns of such eseociation or individual banker, by said coamissioner, or whish shall be fond to have
on such assoeiation or ladlviolated air law of this State, binding
e duel eeaker„ such association or individual banker shall be liable to
be eroeeeded against by said commissioner in the same aenner and with
lite effect es eay incorporated bank way be eroceeded aeainst for a vielation ef its charter.
Sec. E. The shareheieers, or a majority of them in ti.liouat, xo
shell be owners of ally ineoreoeeted bane ceetinuing the business of
banxing until the expiration of their charter, ano who shall have aseocieted themselves for the eereose of benkine under the erovisioae of
this act, shall be eatitled to receive from the tre surer, who is hereby
authorized to ibbil0 to the association so formed, circuiatiue notes, in
amounts of not less than ten thousand eollars, aeon the deeeeit of securities of the kind before uescribed end te aired ty the erevlaions of
this act, to ea amount equal to the circulating notes so issued. Sut if
such banking association, so formed, shall bot have eepoaetee kite the
treasarer during the three years next following the date of their ertieles of association, an amount equel to that required by the erovisions
of this act, es security for circuleting notes, previvas to commencing
the business of benzine, the treasurer is Lereby eeeowerea to retain the
interest accruing upon securities so deposited, until such i.lasociation
nal; cemplied with the provisions of this act in relation to the &mount
of security to be depoeited aith the treasurer.
Sec. 36. If the shareholders, or a mejority of the in amount, of
agy incorporietec Chalt, within one Jeer of the exeiration of its charter,
shall file with the president thereof a notice in writing that they ineven theaselves of the provisions of this act, to eseociate
tend
for the purpose of beneing, it shall be laeful for the airectors of
said bunk to purchase and hole such atock end other securities as the
treaeerer is or may be authorized to reeeive for circulating notes under
the provisions of tnes act, to such an amount as they shall deem for the
interest of the shareholders thereof.
aee. 57. an ussociAion hereafter formed to take the piece of an
incerporated bane, whose charter hes expired, or is about to expire, mey,
when all the saereholeers of such incerporatea benx have assented to Its
orgeaization unaer this act, take and hold, in addition to such real
estate as is erescribed by the twenty-fourth section of this act, much
other real estate es such beak may hold at the ties of the transfer of
the proeerty of the incorporated bank, having been received by it in daycent of ,iebts xeviousay contracted to said banks according to lee.
sec. be green any individuel beaker, or the officers of any eanxiae
,osoci&tioa, desirous of reliaeuishing the beeeing buaineee, statil have
redeemed at least ninety eer cent. of their circulating Lutes, and shall
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Federal Reserve Bank of St. Louis
-10-
credit in
.roduce to the treasurer a certificate of a oeoosit to his
circulating
the
with
such :orrt Ls& he ahall aoorove, to an equal diso_nt
receive
to
him
for
ootes of such bone unredeemed, it shall be lawful
by
deposited
e
the some, Lod to give up all the securities theretofor
g
circuletin
of
such beaker or bon4ing association, for the redemption
aotes issued.
Sec. Z. Such individual banter or baoxiog association, after
having cooplied with the provisions of the last preceding oection, may
give ootice for to years in some newspaper in the coauty w-ere such berv
shell have been located, that all circulatilg notes isooeo by such individual banker or betaking association, must be oreoenteo -t the treasurer's office witoin two years from the date of such notice, or that
the funds eposited fur the redeootion of he notes hill be elven up
to the o.nik or ussoci.tion; and on receiving setisfactory proof of the
giving such notice for the tioLe oforeseid, the treasurer shall ourlention or bank, any securities which he
der to the order of said
any
unreoeemed notes of the said dissociaof
may ho/o Lor the oeyaeut
tion or bank.
Sec. 40. every individual 'A,snker who shall eateblish beak/0g under the provisions of this eot, shall file with the treasurer a certifleete sooting the town, city, or villate in which he resides, aod
thereafter it shall not be lawfol for such indivioual beaker to transact busioese anuer this at in any other place than in whicO he resides,
_Lied in owse of espy change of residen.e of such iodividuel banker, he
isli forthwith file a notice toereof in the treasurer' office as
aforesaid. Apy person neilacting to cosply with the requirements of
this section shall for such neglect forfeit ono Ato the treosurer
of this LAate one thousand dollars, to be aueO fox and recovered by the
S'ete's attorney for the co..nty in which such bank aheli hove been established, in the name of the State treL:surer.
sec. 41. It shall be the duty of the treasurer to receive mutilated ci.c.41Aine notes issued by him, ano after mating a record of them,
their denominetion and amount, to deliver in lieu thereof other circaluting notes to the same amount.
Sec. 4i.. There shall be a000inted, annually, a joint committee of
the legislature, Abase duty it shall be to *mania* ooch of the secorities depooited in the treasurer's office, e banAin‘ associations and
individu,1 baecers, together with the books and 2apers thetein relating
to the bosinesa of bunking, os the said committee may deem necessary to
enoble them to report the true stolte and condition of that department
to the legiel000re.
itsc. 46. The report of the book commissioner shall aos.- toe amoont
of louus and aiscounts, over drafts, due from bauks, due from directors
of said oantii, due from brokers, real estote soecie, cash items, stack
-11 -
arid promiseory notes, bills of solvent .emks, bills of suspended benks,
loss and exeense account, cueitel, circaletieu, erofits, amount dur to
banks, emount due to .ndivideels, eAount aee to treasurer of State,
ele.nt due depositors on hare., amount due not iaelueed uneer either of
the above heads.
Sec. 44. The caeital stock of every beneer or betreine essocietion,
esteblished under the provisions of this act, shall be liable to taxation, tine it shall be the duty of the eaoeier of such banter or banking
associ tion, to teenemit to tee clerks ef the several to.as ethin tais
State, in which aey shereholeere of the same shall reside,
41 ae not
.
of the aamea of 1i1 such seeireeelders, 4th the asoant evere each eeereholeer mey own on the first dey of April in each year, eeech elount
ehell by the listeles be set in the list of such sherehelder, it its
actaal market value.
Sec. 45. The direetors of :ley such beelieg essociation, or individuel eanker, shall be liable to day to the creditors and stockholders
of elle such bank all losses which may be sustained in consequence of wow
violation 1% the of the provisions or this act, or of raw other law, or
otner unfaithfulness in the discharge of their efficiel duties; and spLe
number of such directors see- be sued in tee same action be aely elelsent'
under the erovisions of this section.
Sec. 46. Joy director, oho see have paid more thee his sure af the
liabilities mentioned in the preceding section of this ect, mey have ene
)roeer action in law or equity egeiast such other directors .s shell uot
nave paid their full seeres.
c. 47. Such beneing association or ineividuel b_axer, shall not
receive or ue.Land say greater interest or discount on eee note, dreet,
or seeuriey, than et the rate of six per cent. per annum; but each interest or discount eqy be celculated and taken uccordine to the established rules ef beating.
Sec. 4. No such bunking associetioa or iaaivieuel beneer, seell
eirectly or indirectly employ its muaey in trine or commerce, other ths_
is in this act provided, or dell, or trede in bAyini; or selling any
goods, chrAtels, verse, or sercbandise; ezalAgai That such bLn.sing
soci-tion m4 sell all kinds of proeerey which shall come .ato its possession, in the ordinary collection of its debts. '
Sec. 4. ...11 bills und notes of such benking association or inaividual beaker, shall et 111 ties be received by said essocietion or indivleuel benxer, en all judements, executions, or demands, cede eayeele
to, or the property of, such bunAing essociation or inaiviaual beaker.
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Federal Reserve Bank of St. Louis
12
Sec. 50.
All such bantine associations or inAviuual canters shall
letich the lividends of ,,rofits shall, be
usually ueclared, ay into the treas4ry of this state one •der
cent, of
.
the capital of such O.U48; i'rovided. That if such b:Auing associat
ion or
indiviaual banter, shall teed b ufficient •.leposit of funds, in the
city
of Boston, in the IL'ommonwc-ith of Massuchusets, um shall at ttat
city
unifor4y case their bills to be receemed at par, such bank 6hall
be
exempt from such paymLnt; but if they shall fail to redeem their
bills
or notes, for the period .;f ten Uivs in the whole, in any one year,
the
said tax shall be paid for that year.
seei-anomaliy, at the times
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Federal Reserve Bank of St. Louis
Sec. 51. The lftialature may at
Loy
oec. 5. This act shall tate effect
time
1.ter or re)eal this act.
from it
passa4s.
No. 46.
AN ACT IN ADDITION To CHAPTER EIGHTY-FOUR OF ThE
COMPILED STATUS, RELATING TO BANKS.
Section
1. Bank commissioner annually to ascertain whether the directors of
any bank have not given bond required by section fifty-seven and
section eighty-seven of chapter
eighty-four of the compiled statutes, and in such case to require
directors to give such bond.
2.
Section
vacancy and furnish bonds, and
on failure thereof commissioner
to proceed against the bank as
insolvent.
5.
Office of director failing to comply with such order to become vacant. Remaining directors to fill
No banks to issue bills, &c. until bonds required by section
fifty-seven and section eightyseven of chapter eighty-four of
the compiled statutes are executed.
4. Bank fund to remain liable, &c.
5.
Disposition of remaining part of
bank fund.
It is hereby enacted by the General Assembly of the State of Vermont,
as follows:
Section 1. It shall be the duty of the bank commissioner annually,
during the months of January and February, to ascertain whether there
are any banks in this State whose directors have not given the proper
bond reuired by sections fifty-seven and eighty-seven of chapter eightyfour of the compiled statutes; and upon ascertaining that there are such,
it shall be the duty of said commissioner to file with all such banks a
written order, therein requiring the directors of such banks to procure
bonds agreeably to the provisions of said sections fifty-seven and eightyseven, within a certain time to be fixed in said order, not exceeding
sixty days.
•
Section 2. If any director or directors shall fail to comply Aith
said order, his or their said office shall so far become vacant as to
authorize and require the remaining portion of said board of directors
within ten days to fill said vacancy and duly certify the same to the
commissioner; and if said board of directors shall fail to fill said
vacancy and to have the necessary bond or bonds furnished to said commissioner within ten days, it shall be the duty of said commissioner to
proceed against said bank as an insolvent bank; and such neglect to furnish said bond or bonds shall be deemed an act of insolvency on the part
of such bank.
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Federal Reserve Bank of St. Louis
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Section 5. No bank shall hereafter issue bills or commence business
as such until the bonds shall first have been executed agreeably to sections fifty-seven and eighty-seven of chapter eighty-four of the compiled
statutes.
Section 4. "The bank fund" already accumulated, or which may accumulate, shall remain liable, agreeably to the provisions of chapter eightyfour of the compiled statutes, until all of the banks of this State shall
have complied with the provisions of section one of this act, or until
such banks as do not comply with said section one have been proceeded
against and finally closed agreeably to section tvvo of this act and the
provisions of chapter eighty-four of the compiled statutes.
/ Section 5. If anything remains of said bank fund after all the provisions of this act and of said chapter eighty-four are complied with,
the same shall be disposed of agreeably to the provisions of said chapter
eighty-four of the compiled statutes.
Approved, November 10, 1857.
'
•
•
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Federal Reserve Bank of St. Louis
Col:Liled Statutes
of the Etate of Vermont
1839 to 1850
Cnapter 84
Index
Section
,
1.
Certain banks subject to the )rovisions of this chapter.
Bank Fund
.
K•
Amount to be )aid to state treasurer annually.
5.
Affidavit stating the amount of stock, etc. to be delivered trcacurer.
4.
Four anc r h!,11
r.
Treasurer to keep account of ban, fund.
C.
Fund to be the ,)rooerty of the tanks, to be vested in .Toductive
securities.
7.
Income of thc fund to be paid to banks.
cent. on cepital to be ,aid for
an: fund.
8. If bank fund is reoucec, dyments to be again made.
9. If bank rove in;:olvent, chanceil4 to order treasurer to
bank fund..
10.
Treasurer, .on the receipt of such order, to
P y out
of
ay to receiver.
• 11. If bank fund is insufficient, first moneys received tnereafter to
be a)plied.
If:.
• 13.
14.
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Federal Reserve Bank of St. Louis
Money -sic by tresurer to be a charge on the ban: fun.
Each bank, on the e)Oration of its charter, entitle, to its share
of the 1.)&11K fund.
CreGitors of tile. Leak not entitled to intere7t tefore demand, or titter the order of chancery.
•
/
74
••
o ‘443,
1
.
S
•
,
Lection
Bank Commisnioner
15.
Bank commissioner, to be annually appointed, to visit ane inLect cEich
bank :.)nce in twelve months.
••••
16, 17.
18.
In
•
ection of banks
when to be made.
IL"±
Comitissioner to make report.
• 19. :;tockholeer of bank, not to be apointed commissioner.
•
•
▪ Items of report of commission-r.,
fa.
•
Commissioner to report amount of dividends ceciared by .-einks.
Commissioner to be under oath; - his compensetion.
His accounts, how audited and ?aid.
riy time. on reuest.
24.
To inspect at
15.
His authority to visit, etc.
26. Say examine officer's on oeth.
Proceedings Against
nsolvent Bunks
27. If bank is inolvent, or has violated its charter, comnissioner to
procure an injunction, etc., notice to be given.
7
26.
Court of chericery, on granting an injun:tion, to avoint receiver, e:c.
29.
4ceiver to give bonus, etc.
"FO. ?owers ac
'
cuties of teciiver.
71.
If moneys collected by receiver is insufficient to redeem bills,
fun() to be apaled.
(h
Penalties for Certain Lets
r)2.
Bank curter forfeitee, for Tisuing llis illegally, for not peying to
trew3urer, if one half capital lost, if it suspend :,-)ecie eyments over
sixty days, if officers refuse to be examined by commissioner.
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Federal Reserve Bank of St. Louis
•••
7
Section
33.
Punishment for making false statement, or exhibiting false
err.
Closing of Bank before Ilpiration
of Charter
34.
41/
5•
Bank may close its husiness before harter expires -- 6overnor may
issue proclamation.
Proclamation not to issue unless two-thirCs of the votes in favor, etc.
Prey: Ions to Onich Only Banks Incorporeted
Previolsly to 1840, Are Subject
1( „9..5' 56.
Fifty per cent, of capital
1(1
57.
Bank rechartered to reduce, or pay in, all its cepital stock.
3
38.
Certficate under seal to be filed with treasurer.
Ff.
Bank not suject to the provisions of this chapter, if
is holcen.
40.
Punishment for fraudulently issuing bills, etc.
41.
Loans not to be made on pledge of stock.
tock to be ,,aid in before discount.
rivet, property
4. Stockholders arm 'officers (lot to be indebted core than fiftEen per cent.
of capital stock.
s
43. If more than fifty per cent., charter forfeit.
44.
Bank hereafter churtered, not to loan until all capital
45.
Capital stock not to be divined until cnarter expires.
46.
Bank commUtee not to visit banks subject to this chapter.
47.
Auditor of accounts to audit accounts of the
paid.
an
tack is :(aid in.
commis3ioncr, -- how
Banks Subject to Remaining :rovisians
of This Chapter
/
48.
Banks chartered in 1840 or since; to what
49.
Banks Ireviously cha tered may avail theaselvEs of same (rovisiona.
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Federal Reserve Bank of St. Louis
1.-3,aion. subject.
4
:jection
v5O.
idanner of proceeding for this purpose.
151.
To lodge with treasurer co y of vote.
5.3ans. charters declared public acts.
Their kanagement, Officers, Itc.
53.
General manueatenL.
office.
54.
Votes of vtockholders, how a):ortioned.
55.
et,yments on ,nntrcs regulated. Notice to be given, SO caya before time
of )ayment. ibrfeiture in case of z.e61ect.
56.
Liabilities of directors.
57.
Bonds to the treaEurer, ho
Bonds say be prosecuted.
58.
Restriction.
59.
acmcd: in case of Oel...ncuent
60.
Office-3, now ai9ointed. Term of office.
maae, anu for what purposes.
61.
Cashier to give bonds.
C. Lhare3 transferable.
directors, --
Votes by 2:roxy.
term of
ixceptions.
tioned, secured, and by whoa approvec.
irectors.
Conditions
Compensation.
By-laws, how
bond.
Trensfers, when valid.
Capital •-toc, Yinen to Be Paid In, Itc.
65.
'hen loans or ciscounts may be made.
64.
Luty of bank commissioner.
Further restrictIons.
Certificate to be made to the treasurer.
65. fUrther restrictions.
66.
Luty of bank, in case of extension of charter.
67.
Capital stock not to be ,4ithdrawn.
66.
issessments on snarer regulated.
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Federal Reserve Bank of St. Louis
Proviso.
— 5 —
69.
Losses of apital stock, ,roviAon for raising deficiency.
for neglect, may be iroceeded against.
70.
To vihat extent real estate may be holden.
Lirectora
Loans, Liscounts, Itc.
71. Loans and discount,.
Lividends.
7. Rate of interest.
7%
Restriction.
74.
Limitation of indebtedness in case of stockholders and officers.
Further r(
75.
Above restrictions not to extend to Leposits in banks in commercial
cities. (.. 9).
76.
!:;o loan exceeding t50, to be made without aplrovel of majority of
directors.
77.
Loans on pledge of stock
76.
Consequences of unlawful loan.', Etc.
79.
Penalty in case of loans contrary to section 74.
"T/ 60.
Proviso.
rohibited.
Loans to state regulated.
Bills, Notes, Their Issue, Payment, ltc.
61. Issue of bills limited.
62.
Bills and notes where payable.
8. idatilitiee of bank in case of refusal or delay of eyment in gold
or silver.
e4.
No fractional bills to be issued.
65.
_ca,,lty for over issue of bills.
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Federal Reserve Bank of St. Louis
-6-
section
Tax to the aate anc Exemstions Therefrom;
And Exemptions from Payment to the Benk Fund.
Proviso.
86.
Lemiannual tax to be paid to state treasurer.
87.
Conditional exem,-tion from )syment to the bank fund.
Bonds of the Lirectors; Their Renewal,
Lischar e and Prosecution.
/ • 86.
89.
O.
Duty of bank comissioner. Bonds may be renewed, with aositional securities. Liabilities in case of refuse! or neglect.
A
reasurer may aiscnarge mortgage.
4
Prosecution of bonds, etc.
Proceedings Against Insolvent Banks,
Further Provisions.
91.
Proceedings agtinst insolvent banks, chancellor to limit time for presenting ant :Iroving claims.
9E.
Cisims may be submitted to chencellor or commissioner, upon re,ueFt, etc.
9%
Receivers empowered to orosiute tirectors for benefit of cretitor.
Damages recovered to be teemed assets. How tisposed of.
94.
Receivere empowered and directed to institute suits in certain cases.
95.
Moneys or real estate set off on execution to be held by receiver as Assets of the bank. How disposed of.
96.
When assets are sufficient to :ay bills returned within a certain time,
chancellor not to draw for any part of bankfUnd.
97. If asets of btin
ceiver.
drove insufficient, duty of chancellor -- of the re-
98.
Further contirgecy -- duty of chancellor.
99.
Claims against bank, how investigated.
100.
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Federal Reserve Bank of St. Louis
bonds of directors, suits regulated.
Conditions of :payment.
-7-
A, al fraa, Lecree of Chancellor
ApJeal may be had to sureme court.
Subscriptions for btock
1J2.
Subscriber to make oath that Ai subscription is bona fide, etc. Tovision in case subscriber is sick or othemise oisableo. Subscriptions
by trustees, etc.
1:j.
Commissioner may acminiAer oath.
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Federal Reserve Bank of St. Louis
COMPILED STATUTES
OF THE STATE OF VERMOET
1859 to 1850
Chapter 84
Banks
, Sect. 49. Any banking company in this state, chartered prior to the
year 1840, may avail tneaselves of the provisions of "an act relating to banks",
approved October 28, 1840, (Paragraphs 48, 52 and subsequent, designated as
secs. of No. 1 of 1840), with the exception of section thirty-nine of said act,
(paragraphs 87 of this chap.) in the manner provided in section two of this act,
(paragraph 50 of this chap.). (Sec. 1 of No. 43 of 1842.)
' Sect. 50. Any such banking company, desiring to avail themselves of
the provisions of the act aforesaid, (No. 1 of 18400 may at any meeting warned
for that purpose, and warned in the manner required for the choice of directors
tote to avail themselves of the provisions of the act aforesaid, and thereupon
such banking company shall be entitled to all the benefits, and exemptions, and
shall be subject to all the liabilities and restrictions of said act, with the
exception of said section thirty-nine, (paragraph 87 of this chap.) (Sec. 2 of
No. 43 of 1842).
•
Sect. 51. Such banking company shall not avail themselves of the
provisions of the act aforesaid, (No. 1 of 1840) until such company shall lodge
with the treasurer of this state a certified copy of said vote, under the seal
of such company, and signed by the oresident and cashier thereof. (Sec. 3 of
No. 43 of 1842.)
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Federal Reserve Bank of St. Louis
•
COMPILED STATUTES 1851
S. /
CHAPTER 84.
Section 1. Every moneyed corporation, having banking pcners,
which shall have been created or rechartered, subsequent to the first
day of October, in the year of our Lord, one thousand eight hundred and
thirty-one, shall be subject to the provisions hereinafter contained.
(Sec. 1 of R. S.)
Bank Fund.
v/Section 2. For the purpose of creating and continuing the fund
herein established, every such corporation shall, on or before the third
Thursday of October, in every year, pay to the treasurer of this state a
sum equal to three fourths of one per cent. on the capital stock of said
corporation paid in, after excepting therefrom such part of said capital
stock as is, or may be held by this state, and at that rate for such time
as such corporation shall have been in operation, if less than one year.
(Sec. 2 of R. S.)
•
/Section 3. At the time of making such payment, the corporation
making the same, shall cause to be delivered to .;11ch treasurer, a statement, signed by the president and cashier of the corporation, and verified by their oaths, specifying the actual amount of the capital stock
of such corporation, ?aid in, and designating, in such statement, the
amount of such capital stock as shall be owned by the state. (Sec. 3
of h. S.)
-'Section 4. Such annual payments shell continue to be made until
every such moneyed corporation shall have paid into the treasury four and
one half per cent, upon its capital stock, which shall be and remain a
perpetual fund, to be denominated "the bank fund," and to be inviolably
appropriated and applied to the payment of sxh portion of the debts, exclusive of the capital stock, of apy of the said corporations which shall
become insolvent, as shall remain unpaid, after applying the property and
effects of said insolvent corporation, as hereinafter provided. (Sec. 4
of R. S.)
/Section 5. The treasurer of the state shall keep proper accounts
of the said 'nank fund, separate and distinct from the funds of the state,
and shall, from time to time, report to the general assembly the condition
thereof. (Sec. 5 of R. S.)
Section 6. The fund aforesaid shall be the property of the respective corporations by which the same shall have been paid, in proportion to the amount which each of such corporations shall have contributed
thereto; but the treasurer shall have power, and it shall be his duty,
•
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Federal Reserve Bank of St. Louis
GENERAL STATUTES uF VERMUNT, 186Z.
Chapter 89 relating to banks, contains no reference to the Bank Fund,
except Sections 88 and 89, as follows:
nbank Fund Not Affected
-Sect. 88. Nothing in this chapter shall in any way affect "the bank fund"
so called, which has already accumulated, or which may accumulate, under
any previous laws of the state, providing for and creating a safety fund
for the payment of bills of insolvent banks, but the same shall be and remain liable, agrreably to the provisions of the existing laois under which
the fund was created, to all intents and purposes, until all claims upon
such fund shall be satisfied; and if anything remains of said fund after
such claims have been satisfied, the same shall be disposed of agreeably
to the provisions of the law creating the fund, and in such case made and
provided.
"Repeal of ‘dertain Acts, Etc.
•
/
J Sect. 89. All laws heretofore passed on the subject of banking which
are incousistent with the provisions of this chapter, or are superseded
by it, are hereby repealed; but their repeal shall not affect or impair
any right or liability which has accrued under the same, but all such
rights and liabilities shall be and remain the same as if there had been
no repeal thereof, and may be enforced in the same
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Federal Reserve Bank of St. Louis
APPENDIX
,
t:/,
the secResolved, by the Senate and House of hepresentatives, That
ed with the Laws, as
retary of State be directed to cause to be publish
of
s
Banking.
busines
the
ze
authori
to
an Appendix, the bill
Adopted by the two Houses, November 13, 1d49.
An Act to Authorize the Business of Banking
of Ver,ont,
It is hereby enacted by the General Assembly of the State
as follows:
•
and reSection 1. The Treasurer of the State is hereby authorized
guard
to
manner
best
the
in
printed
and
d
quired to cause to be engrave
similthe
in
notes
ting
circula
of
y
quantit
such
against counterfeiting,
authorized
itude of bank notes in blank, of the different denominations
from time
to be issued by the incorporated banks of this State, as he may
act,
this
of
ons
provisi
the
effect
into
carry
to
to time deem necessar:i
shall
notes
ting
circula
blank
Such
be.
prescri
may
he
and of such form as
d
provide
be
to
books
proper
in
red
registe
and
d
numbere
be countersigned,
his
and kept for that purpose, in the office of said treasurer, under
direction, by such person or persons as the said treasurer shall appoint
for that purpose, so that each denomination of such circulating notes
shall bear the uniform si,nature of such rejster, or one of such reg.isters.
-Section 2. Whenever any person or association of persons, formed
for the purpose of banking under the provisions of this act, shall lawfully transfer tJ the said treasurer any portion of the public stock issued, or to be issued, by the United States, the State of Massachusetts,
New York, or Maine, such person, or association of persons, shall be entitled to receive from the said treasurer, an equal amount of such circulating notes, of different denominations, registered and countersigned as
aforesaid; -L..ut such public stock shall in all cases be, or be made to be,
equal to a stock producing six per cent, per annum; and it shall not be
lawful for the treasurer to take such stock at a rate above its par value,
nor above its current market value.
:Section 3. Such person or association of persons, are hereby authorized, after having executed and signed such circulating notes in the
manner required by law, to make them obligatory promissory notes payable
on demand, at the place of business within this State, of such person or
association, to loan and circulate the same as money, according to the
ordinary coarse of banking business, as regulated by the laws and usages
of this State.
O
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Federal Reserve Bank of St. Louis
-2-
'Section 4. In case the maker or makers of any such circulating
note or notes, countersigned and registered as aforesaid, shall at any
time hereafter, on lawful demand, during the usual hours of business,
between the hours of ten and three o'clock, at the place where such
in
note or notes is or are payable, fail or refuse to redeem such note
or
note
notes,
such
of
holder
the
the lawful money of the United States,
ment
making such demand, may cause the same to be protested for non-pay
and
menner;
usual
the
in
seal,
l
by a notary public, under his officia
, shall
the treasurer, on receiving and filing in his office such protest
or
note
such
of
makers
or
maker
the
forthwit give notice in writing, to
ten
for
0,
6,
do
to
omit
shall
they
or
notes, to pay the same; and if he
(undays after such notice, the treasurer shall immediately thereupon,
against
defence
legal
and
good
a
is
there
less he shall be satisfied that
circulating
the payment of such note or notes,) give notice that all the
of the
out
be
redeemed
will
tion,
associa
notes issued by such ;Ierson or
given
be
shall
notice
which
,
purpose
that
trust funds in his hands for
the
where
county
the
in
printed
r
newspape
some
by publishing the same in
there
in
case
or
shed,
establi
is
tion
associa
business of such person or
is no newspaper printed in such county, such notice shall be published
in some newspaper printed at Montpelier; and the treasurer shall be required to apply the said trust funds, belonging to the maker or makers
of such protested note or notes, to ,the payment pro rata of all such
circulating notes, liether protested or not, put in circulation by the
maker or makers of such protested note or notes, pursuant to the provisions of this act, and to adopt such measures for the payment of such
notes as will in his opinion most effectually prevent loss to the holders
thereof.
Section 5. The treasurer may give to any person or association of
persons, so transferring stock, in pursuance of the provisions of this
act, powers of attorney to receive interest or dividends thereon, which
such person or association may receive and apply to their own use; but
such power may be revoked upon such person or association failing to
redeem the circulating notes so issued, or whenever in the opinion of
the treasurer the principal of such stock shall become an insufficient
security; and the said treasurer, upoa application of the ozner or owners of such transferred stock in trust, may, in .his discretion, change
or transfer the same for other stocks of the kinds before specified in
this act, or may transfer the said stocks or any part thereof, of the
mortgages, or any of them hereinafter mentioned and provided for, upon
receiving and cancelling an equal amount of such circulating notes
delivered by him to such person or association in such manner that the
circulating notes shall always be secured in full, either by stocks,
or by stocks and mortgages, as in this act provided.
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Federal Reserve Bank of St. Louis
the paySection 6. The bills or notes so to be countersigned, and
shall
stocks,
of
public
r
transfe
the
by
secured
ment of which shall be so
"
stocks.
of
public
pledge
the
by
d
be stamped on their face, "secure
id, to
Section 7. -Instead of transferring public stocks as aforesa
for
be
lawful
shall
it
notes,
secure the whole amount of such bills or
beelect,
so
shall
they
case
such person or association of persons, in
of
payment
the
secure
to
fore receiving any of the said bills or notes,
the
to
rring
transfe
by
one half of the whole amount so to be issued,
per
treasurer bonds and mortgages upon real estate bearing at least six
such
all
case
which
in
nually,
semi-an
cent. interest payable annually or
bills or notes issued by the said person or association of persons,
stocks
shall be stamped on their face, "secured by the pledge of public
and real estate."
110
Section 8. The real estate so mortgaged, must be improved, productive, -,mincumbered lands in this State, exclusive of any buildings
not
thereon, and the amount for which said lands are so mortgaged must
e be
any
mortgag
shall
nor
lands;
said
exceed two fifths of the value of
the
and
each,
d
dollars
thousan
five
received for a greater amount than
treasurer shall prescribe such regulations for ascertaining the title
and value of such lands, as he may deem necessary, and such bonds shall
be payable within such time as the treasurer may direct.
Section :7'. The treasurer may, in his discretion, re-assign the
tion
said bonds and mortgages, or any of them, to the person or associa
mortand
bonds
d
approve
other
ng
receivi
who transferred the same, on
gages of equal amount; and when any sum of the principal of the bonds
he
and mortgages transferred to the treasurer shall be paid to him,
and
bonds
the
rred
transfe
that
tion
associa
or
person
shall notify the
assoor
person
such
to
same
the
pay
may
and
,
payment
such
mortgaLes, of
amount.
equal
of
es
mortgag
and
bonds
d
approve
other
ng
ciation, on receivi
Section 10. The person or association of persons, assigning such
t
bonds and Mortgages to the treasurer, may receive the annual interes
or
to come thereon, unless default shall be made in paying the bills
of
ion
in
theopin
unless,
or
id,
aforesa
as
signed
notes to be counter
bethe treasurer, the bonds and mortgages, or stocks so pledged, shall
notes.
or
bills
such
of
payment
the
y
for
securit
come an insufficient
4IP
Section 11. In case such person or association of persons, shall
fail or refuse to pay such bills or notes, on demand, in the wanner
specified in the fourth section of this act, the treasurer, after the
auction
ten days notice therein mentioned, may proceed to sell at public
d, or
assigne
so
es
mortgag
and
ponds
the
or
,
the public stocks so pledged
pay
shall
sale
such
of
s
proceed
the
of
out
and
any or either of them,
have
and cancel the said bills or notes, default in paying which shall
conbe
shall
ed
contain
act
this
in
nothing
but
id;
aforesa
been made as
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Federal Reserve Bank of St. Louis
-4 -
sidered as implying any pledge on the part of the State for the payment
of said bills or notes, beyo.ld the proper application of the securities
pledged to the treasurer for their redemption.
Section 12. The public stocks and bonds and mortgages to be deposited with the treasurer, by any such person or association shall be held
by him exclusively for the redemption of the bills or notes of such per
son or association, put in circulation as money, until the same are paid.
' Section 13. The plates, dies and materials to be procured by the
treasurer, for the printing and making of the circulating notes provided
for hereby, shall remain in his custody, and under his direction; the
expenses necessarily incurred in executing the provisions of this act,
shall be paid by the treasurer out of any moneys in the treasury not
otherwise appropriated; and for the purpose of reiMbursing the same, the
said treasurer is hereby authorized and required to charge against, and
receive from such person or association, applying for such circulating
notes, such rate per cent. thereon as may be sufficient for that purpose
and as may be just and reasonable.
'Section 14. It shall not be lawful for the treasurer, or other officer, to countersign bills, or notes, for any person or association of persons, to an amount in the aggregate exceeding the public stocks, or public stocks and bonds and mortgages, at their value, as before provided
in this act, deposited with the treasurer by such person or association,
and any treasurer, or other officer, who shall violate the provisions of
this section shall, upon conviction, be adjudged guilty of a misdemeanor
and shall be punished by a fine not less than five thousand dollars, or
be imprisoned not less than five :ears in the State prison, or by both
such fine and imprisonment.
/Section 15. Any number of persons may associate to establish offices
of discount, deposit and circulation, upon the terms and conditions, and
subject to the liabilities, prescribed in this act; but the aggregate
amount of the capital stock of any such association shall not be less
than fifty thousand dollais, nor more than two hundred and fifty thousand dollars.
Section 16. Such persons, under their hands and seals, shall make
a certificate which shall specify: -- 1. The name assumed to distinguish such association, and to be used in its dealings. 2. The place
where the operations of discount and deposit of such association are to
be carried on, designating the particular city, town, or village. 3.
The amount of capital stock of such association, and the number of
shares into which the same shall be divided. 4. The names and places
of residence of the shareholders, and the number of shares held by each
of them respectively. 5. The period at which such association shall
•
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Federal Reserve Bank of St. Louis
-
-5 -
commence and terminate; which certificate shall be acknowledged and
recorded in the office of the clerk of the county where any office of
such association shall be established, and a copy thereof filed in the
office of the Secretary of State.
Section 17. The certificate, required by the last preceding section to be recorded and filed in the office of the clerk of the county,
and Secretary of State aforesaid, or copies thereof, duly certified by
either of those officers, may be used as evidence in all courts and
places, for and against any such association.
'Section 18. All banking associations, or indivicual bankers, organized under the provisions of this act, shall be banks of discount
and deposit as well as of circulation, and shall have power to carry
on the business of banking, by discounting bills, notes, and other
evidences of debt; by receiving deposits, by buying and selling gold
and silver bullion, foreign coin and bills of exchange, in the manner
specified in their articles of association, for the purposes authorized by this act; by loa,aing money on real and personal security; and
by exercising such incidental powers as shall be necessary to carry on
such business; to choose one of their number as president of such asso
eiation, and to appoint a cashier, and such other officers and agents
as their business may require, and to remove such president, cashier,
officers and agents at pleasure, and to appoint others in their place.
And the usual business of banking of said association or individual
banker, shall be transacted at the place where such banking association
or individual banker shall be located, agreeable to the location specified in the certificate directed to be made by the second clause of the
sixteenth section of this act, and not elsewhere.
/Section 12. The shares of said association shall be deemed personal property, and shall be transferable on the books of the association, in such manner as may be agreed on in the articles of association;
and every person becoming a shareholder by such transfer, shall, in
proportion to his shares, succeed to all the rights and liabilities of
prior shareholders; and no change shall be made in the articles of association, by which the rights, remedies, or securities of its existing creditors shall be weakened or impaired. Such association snail
shall not be dissolved by the death or insanity of any of the shireholders therein.
/Section 20. It shall be lawful for any association of persons, organized under the provisions of this act, by their articles of association, to provide for an increase of their capital, and of the number of
their associates, from time to time as they aay think proper, the aggregate capital not to exceed two hundeed and fifty thousand dollars, as
before provided.
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Federal Reserve Bank of St. Louis
and
Sec. 21. Contracts made by any such association, and all notes
by
signed
be
shall
money,
as
tion
bills by them issued and put in circula
acsuits,
all
and
;
thereof
the president or vice president, and cashier
tions and proceedings, brought or prosecuted by or on behalf of such asaociation, may be brought or prosecuted in the name of such association.
/Sec. 22. All persons having demands against any such association,
may maintain actions at law or in equity, according to the nature of the
case, against such association by their name; and all judgments and decrees obtained or rendered against such association, for any debt or lijoint
ability of such association, shall be enforced only against the
to be
be
liable
shall
property
which
and
tion,
associa
property of the
or
t
decree.
judgmen
such
any
under
on
executi
taken and sold by
in
' Sec. 23. No shareholaer of any such association shall be liable
his individual capacity, for any contract, debt, or engaaeaeat of such
association, unless the articles of association by him signed shall have
declared that the shareholders shall be so liable.
Sec. 24. It shall be lawful for such association to purchas9 hold
and convey real estate for the following purposes: 1. Such as shall be
necessary for its immediate accomodation in the convenient transaction
of its business; or, 2d, such as shall be mortgaged to it in good faith,
by way of security for loans made by, or moneys due to, such association;
or, 3d, such as shall be conveyed to it in satisfaction of debts previously contracted, in the course of its dealings; or 4th, such as it shall
acquire by way of execution. The said association shall not purchase,
hold, or convey real estate, in any other case, or for any other purpose;
and all Conveyances of such real estate shall be made in the name of the
association.
Sec. 25. Upon the application of creditors, or shareholders of any
such association, whose debts or shares shall amount ta one thousand
dollars, and stating facts, verified by affidavit, a chancellor may, in
his discretion, order a strict examination to be made by a master of
chancery, of all the affairs of such association, for the aurpose of ascertaining the safety of its investments, and the prudence of its management; and the result of every such examination, together with the
opinion of the master and of the chancellor thereon, shall be published
in such manner as the chancellor shall direct, who shall make such order
may
in respect to the expense of such examination and publication, as he
deem proper.
4IP
Sec. 26. If any portion of the original capital of any such associof
ation shall be withdrawn for any purpose whatever, whilst any debts
the
on
profits
the association shall remain unsatisfied, no dividends or
made,
be
er
thereaft
shares of the capital stock of the association shall
until the deficit of capital shall have been made good, either by subscription of the shareholders, or out of the subsequently accruing pro-
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Federal Reserve Bank of St. Louis
7-
fits of the association; and if it shall appear that any
have been made, it shall be the duty of a chancellor, on
any person in interest, to make the necessary orders and
closing the affairs of the association, and distributing
and effects among its creditors and shareholders.
such dividends
application of
decrees for
its property
Sec. 27. Such association shall be liable to pay the, holder of
every bill or note, put in circulation as money, the payi;ent of which
shall have been demanded and refused, damages for non-payment thereof,
in lieu of interest, at and after the rate of twelve per cent, per
annum, from the time of such refusal, until the payment of such evidence of debt and the damages thereon.
Sec. 28. The president and cashier of every association formed
pursuant to the provisions of this act, shall at all times keep a true
and correct list of the names of all the shareholders of such association, and shall file a copy of such list in the office of the clerk of
the county, where any office of such association may be located, and,
also in the office of the treasurer, on the first Mondays of January
and July in every year.
•
Sec. 29. It shall not be lawful for any association formed under
tne provisions of this act, to make any of its bills or notes to be put
in circulation as money, payable at any other place than at the office
where the business of the association is carried on and conducted, and
said bills or notes shall be made payable on demand, and without interest.
Sec. SO. Whenever the securities depositeu for the redemption of
circulating notes shall, in the opinion of the treasurer, become insufficient for that purpose, he may receive the dividends on all stocks,
as well as the interest on bonds and mortgages, and shall deposit the
same in some safe bank or banking association in this State, in his
name, in trust for the association, or banker to whom the same may belong: the deposit to be made on such terms and at such rate of interest as the treasurer may deem most cond—cive to the interest of such association or banker, and to be withdrawn and paid over, whenever, in
the opinion of the treasurer, the securities of such association or
banker shall be sufficient to warrant it.
Sec. 51. The bonds and mortgages mentioned in this act, for securing the payment of the circulating bills or notes, may be made or executed to the treasurer.
Sec. 52. All fees for protesting the circulating notes issued by
any banking association or individual banker, shall be paid by the person procuring the services to be performed, for which such association
• or banker shall be liable, but no part of the securities depositeu by
such association or banker shall be applied to the payment of such fees.
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Federal Reserve Bank of St. Louis
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Sec. 35. It shall be the duty of the bank commissioner, at least
once a year, and oftener if he shall deem it necessary, to inspect every
bank established under the provisions of this act, and report to the
State auditor: 1st. The amount of the certified stock of the capital
stock of the banking association, or individual banker, paid in or invested according to law, or in pursuance of its articles of association,
and the amount of such stock as then possessed: 2d. The value of the
real estate of the association, or individual banker, and specifying
what portion is occupied by the association, or indiviaual banker, for
the trasnaction of business: 5d. The shares of stock held bysuch association or individual banker, whether absolutely, or as collateral security, specifying each kind and description of stock and the number and
value of the shares of each: 4th. The debts owing to the association,
or individual banker, specifying such as are due from moneyed or other
corporations, or associations, the names of such corporations, or associations, and the amount due from each, and also specifying the amount
secured by bond and mortgage, the amount which ought to be included in
the computation of losses, and the total amount of debts then collectable: 5th. The amount of debts owing by the association, or individual
banker, specifying such as are payable on demand, and such as are dur to
moneyed or other corpolations, associations or individual bankers, the
names of such corporations or associations, or individual bankers, and
the amount due to each: 6th. The amount of claims against the association, or individual banker, not acknowledged by it or him as debts: 7th.
The amount for which the association or individual banker is bound as
surety, or for which it may become liable on the happening of contingent
events: 8th. The amount of the notes or bills then in circulation of
said association or individual banker, of loans and discounts, and specie on hand: 9th. The amount of losses of the association or individual banker (if any) charged, specifying whether charged on its or his
capital or profits, since the last preceding statement, and of the dividends declared and made during the same period. 10th. The amount of
real estate, mortgages, and of stocks, together with a description of
such stocks deposited by each association or individual banker, with the
treasurer as security for the circulating notes issued; the market value
of said stocks, as near as the same can be ascertained, and the date to
which payment of interest has been made upon real estate, mortgages and
stocks, and whether said interest has been paid to such banking association or individual banker, or passed to their or his credit on the books
of the treasurer.
' Sec. 34. In case any of the said associations or indiviaual bankers shall refuse to submit its books, papers and concerns to the inspection of said commissioner, or whose officers shall refuse to submit to
be examined on oath, touching the concerns of such association or individual banker, by said commissioner, or whieh shall be found to have
O
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Federal Reserve Bank of St. Louis
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violated apy law of this State, binding upon such association or individual banker, such association or individual banker shall be liable to
be proceeded against by said commissioner in the same manner and with
like effect as any incorporated bank may be proceeded against for a violation of its charter.
•
Sec. 35. The shareholders, or a majority of them in amount, who
shall be owners of any incorporated bank continuing the business of
banking until the expiration of their charter, and who shall have associated themselves for the purpose of banking under the provisions of
this act, shall be entitled to receive from the treasurer, who is hereby
authorized to issue to the association so formed, circulating notes, in
amounts of not less than ten thousand dollars, uaon the deposit of securities of the kind before described and reaaired by the provisions of
this act, to an amount equal to the circulating notes so issued. But if
such banking association, so formed, shall hot have deposited with the.
treasurer during the three years next following the date of their articles of association, an amount equal to that required by the provisions
of this act, as security for circulating notes, previous to commencing
the business of banking, the treasurer is hereby empowered to retain the
interest accruing upon securities so deposited, until such association
has complied with the provisions of this act in relation to the amount
of secarity to be deposited with the treasurer.
Sec. 36. If the shareholders, or a majority of them in amount, of
apy incorporated bank, within one year of the expiration of its charter,
shall file with the president thereof a notice in writing that they intend to avail themselves of the provisions of this act, to associate
for the purpose of banking, it shall be lawful for the directors of
said bank to purchase and hold such stock and other securities as the
treasurer is or may be authorized to receive for circulating notes under
the provisions of this act, to such an amount as they shall deem for the
interest of the shareholders thereof.
' Sec. 37. An association hereafter formed to take the place of an
incorporated bank, whose charter has expired, or is about to expire, may,
when all the shareholders of such incorporated bank have assented to its
organization under this act, take and hold, in addition to such real
estate as is prescribed by the twenty-fourth section of this act, such
other real estate as such bank may hold at the time of the transfer of
the property of the incorporated bank, having been received by it in payment of debts previoasly contracted to said bank, according to law.
' Sec. 38. *hen any individual banker, or the officers of any banking
association, desirous of relinquishing the banking business, shall have
redeemed at least ninety per cent, of their circulating notes, and shall
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2roduce to the treasurer a certificate of a deposit to his credit in
such bank as he shall ap,)rove, to an equal amount with the circulating
notes of such bank unredeemed, it shall be lawful for him to receive
the same, and to give up all the securities theretofore deposited by
such banker or banking association, for the redemption of circulating
notes issued.
'Sec. 3. Such individual banker or baaking association, after
having complied with the provisions of the last preceding section, may
give notice for tao years in some newspaper in the county where such bane:
shall have been located, that all circalatilg notes issued by such individual banker or banking association, must be presented at the treasurer's office within two years from the date of such notice, or that
the funds deposited for the redemption of the notes will be given up
to the bank or association; and on receiving satisfactory proof of the
giving such notice for the time aforesaid, the treasurer shall surrender to the order of said association or bank, any securities which he
may hold for the payment of any unredeemed notes of the said association or bank.
•
Sec. 40. Every individual banker who shall establish banking under the provisions of this act, shall file with the treasurer a certificate stating the town, city, or village in which he resides, and
thereafter it shall not be lawful for such individual banker to transact business under this act in any other place than in which he resides,
and in case of any change of residence of such individual banker, he
shall forthwith file a notice thereof in the treasurer's office as
aforesaid. Any person neglacting to comply with the requirements of
this section shall for such neglact forfeit and aay to the treasurer
of this State one thousand dollars, to be sued for and recovered by the
State's attorney for the county in which such bank ahall have been established, in the name of the State treasurer.
Sec. 41. it shall be the duty of the treasurer to receive mutilated cia'calating notes issued by him, and after making a record of them,
their denomination and amount, to deliver in lieu thereof other circulating notes to the same amount.
Sec. 42. There shall be appointed, annually, a joint committee of
the legislature, whose duty it shall ae to examine such of the securities deposited in the treasarer's office, b.: banking associations and
individual bankers, together with the books and papers therein relating
to the business of banking, as the said committee may deem necessary to
enable them to report the true state and condition of that department
to the legislature.
•
- Sec. 43. The report of the bank commissioner shall show the amoani
of loans and discounts, over drafts, due from banks, due from directors
of said oanka, due from brokers, real estate specie, cash items, stock
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Federal Reserve Bank of St. Louis
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and promissory notes, bills of solvent banks, bills of suspended banks,
loss and expense account, capital, circulation, profits, amount due to
banks, amount due to individuals, amount due to treasurer of State,
amolnt due depositors on hand, amount due not included under either of
the above heads.
'Sec. 44. The capital stock of every banker or banking association,
established under the provisions of this act, shall be liable to taxation, and it shall be the duty of the cashier of such banker or banking
association, to transmit to the clerks of the several tovins Athin this
State, in which any shareholders of the same shall reside, a true list
of the names of all such shareholders, with the amount every such shareholder may own on the first day of April in each year, which amount
shall by the listeres be set in the list of such shareholder, at its
actual market, value.
"Sec. 45. The directors of any such banking association, or individual banker, shall be liable to pay to the creditors and stockholders
of any such bank all losses which may be sustained in consequence of any
violation Iv them of the provisions of this act, or of any other law, or
other unfaithfulness in the discharge of their official duties; ami any
number of such directors may be sued in the same action by any claimant
under the provisions of this section.
Sec. 46. Any director, who mny have paid more than his share of the
liabilities mentioned in the preceding section of this act, may have any
proper action in law or equity against such other directors as shall not
have paid their full shares.
Sec. 47. Such banking association or individual banker, shall not
receive or demand any greater interest or discount on any note, draft,
or security, than at the rate of six per cent, per annum; but such interest or discount may be calcalated and taken according to the established rules of banking.
Sec. 48. No such banking association or individual bunker, shall
directly or indirectly employ its money in trade or commerce, other than
is in this act provided, or deal, or trade in buying or selling any
goods, chattels, wares, or merchandise; Provided, That such banking association may sell all kinds of property which shall come into its possession, in the ordinary collection of its debts.
Sec. 49. All bills and notes of such banking association or individual banker, shall at all times be received by said association or individual banker, on all judgments, executions, or demands, made payable
to, or the property of, such bunking association or individual banker.
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Sec. 50. All such banking associations or individual bankers shall
semi-annually, at the times at which the dividends of profits shall, be
usually declared, ,ay into the treasury of this State one per cent, of
the capital of such bank; Provided, That if such banking association or
individual banker, shall keep a sufficient deposit of funds, in the city
of Boston, in the Commonwealth of Massachusetts, and shall at that city
uniformly cause their bills to be redeemed at par, such bank shall be
exempt from such payment; but if they shall fail to redeem their bills
or notes, for the period of ten days in the whole, in any one year, the
said tax shall be paid for that year.
Sec. 51.
The legislature may at any time alter or repeal this act.
Sec. 52.
This act shall take effect from its passage.
•
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Federal Reserve Bank of St. Louis
•
rui.aLia .,J
Sections 88 and 89, as
thA;
ect. 38. Nothing in this chapter shall in any rJa-." affect "the bank fund", _
called, which has lready accumulated, or which ma:, accumulate, under any
tj
previous laws of this state, provicirv for and creating e. safety fund for
yment of bills of insolvent banks, but the same shall be and remain liable,
fund was
4
a04 agreeably to the provisions of the existing laws under which
Screated, to all intents and purposes, until all claims upon such fund shell
1,;/satisfied; and if anything remains of said fund aftee. such c17:ims Irve
61-i'e satisfied, the same shall be disposed of agreeably to the 7Y-)vi!ri of
f ivd.law creating the fund, and Ln such case made and provided.
tlReoea
•
cf Cert-n Acts, Ftc.
i
u
inl.
alc
Sect. 39. All laws heretofore pau
inconsistent with the provisions of this chapter, or are superseded by it, a/
hereby repealed; but their repeal shall not affe,t or impair any right or
liability which has accrued under ti saac, but all such ri;_Thts ahC lIriltrs
shell bo ald remain the sr.2,e as if there had been no rePeal thereof, an;
be enforced in the same It' .“
•
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Federal Reserve Bank of St. Louis
1
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Federal Reserve Bank of St. Louis
"WTKIN3
'!U‘TKI., for aelln
- 1917 d 83
.2:he teory of a guaranteed btaik under et6te laws is not
of recent origin. Such ban:s were in existence in the United
rtes
one hundred years ago. The secds were first planted in
the sttes of
Vermont bud Nt York, but see
-nve fallen by the wayside and in thorriy
places, and did not long survive their enactoent. People v. Walker,
17
N.Y. 502; in Reciprocity Beak, 22 N. Y. 4; Elwood v. State, 23
Vt. 701;
Danby Bank v. State, 39 Vt. 92, cited Note 32 L. R. A. (H.S.)
1006.
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Federal Reserve Bank of St. Louis
•
Decision of the Supreme Oolat c)
Vol. 23.
Se-o ember term, 1851.
Vermont.
Page 701.
Isaac P. Elwood and Others v. Treasur,3r of Ver:iont.
, art-
.oiability of banks to conifibution.
was made li.
Under the general banking law of 1831 the entire safety fund
sive of
exclu
bank,
vent
insol
any
of
for the .)ayment of all the debts
debts
the
when
time,
the
to
ence
refeT
capital stock, and this without
cular
parti
any
time
what
at
or
ed,
accru
accrued, or when the insolvency
bank be-.- r1 to contribute.
cular bank could not be
Fence that uart of the fund contributed by any parti
debts of an inwithheld from being ap:xopriated for the payment of the
'oayment of whose
solvent bank, upon the ground that the bank, for the
the time, when the
debts it was reoAred, became insolvent orevious to
ence under its
exist
into
came
fond,
the
of
bank, contributing sucil oart
charter.
an order had been
Petition for a writ of mandamus. It was alleged, that
from the bank s-'
nay
state
the
of
urer
made by the chancellor, that the treas
g the debts of the Esse;
fund the sum of :34,617.23 for the purpose of payin
his anser, alleging that he
filed
urer
and that he refused to do so. The treas
except that part of it which
had paid the entire fund, subject to his control,
its re-cLerter, - t*
s
since
Alban
St.
had been contributed by the Bank of
, since the Essex ]
bank having come into existence, under its re-charter
became insolvent.
•
C. W. Prentiss for petitioners.
for Bank of St. Albans.
The opinion of the court was delivered by
mus against the defenRedfield, J. This is a motion for a peremotory manda
,his hands, belonging to the
dant, to require him to pay ova sum of money.in
bt. Albans, since its re-chart,..1.
bank safety fund, and contributed by the Bank of
in the redemption of the bills of
This is claimed, to make up the deficiency
the ground, that the money io
Essex Bank; and the apolication is resisted upon
St. Albans have anpeared and been
not liable for any such -Llroose. The 2rink of
that the Bank of St. Albans was
heard in the matter. The important facts are,
It went into operation, under its
chartered in 1825, and re-chartered in 1836.
expiration of its first chartcr.
re-charter, in January, 1840, soon after the
under injunction and in a course of
The Essex Bank became insolvent, and was put
being wound up, in October, 1839.
•
re-enacted in the Reviser
By the general banking law of 18U, (which is
it was provided, that all btn:-F,
Statutes,) by which he safety fund was created,
e session of the legislature,
chartered, or re-chartered, at that or any futur
section two it was provided.
should be "subject to the provisions of that act." By
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Federal Reserve Bank of St. Louis
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that each bank should pay to the treasurer of the state three fourths of
one per cent. on the capital stock paid in, annually, on the third Thursday
of October. By section four, that this should continue, until each bank should
have paid, in four and a half per cent. on its capital stock, - which should
"remain inviolably appropriated to the payment of the debts exclusive of
capital tock, of any of the said corporetions, which shall become insolveet."
By section eight, if the fund shall be rednced by payment of the debts of any
insolvent corporation, "ever: moneyed corporation then existing, which shall be
subject to this act and ever one thereofter chartered, shall be assessed again
by the treasurer, not exceeding the original rate, until the fund shall be
restored to four and a half per cent. on the capital stock of said bank."
Section eleven provides, that, if the funds in the treasurer's hands shall not
be sufficient to pay the debts of any insolvent bank, the several solvent
banks shall be assessed according to section eight, until the fund is sufficient
to par them, and then they shall be paid. Thus the law stood, until after the
Bank of St. Albans went into operation under its re-chart -r.
•
This statute is doubtless very imperfect and unequal in many resoects.
But there does not seem to be any provision, for elaking the debts of an insolveat bank a charge upon the bare: fund upon t any rule of equitable obligation
among the several banks coming under the general denomination of snfety fund
banks. It is the fund, and the entire fund, which is made liable for the payment of all the debts of any insolvent bank, exclusive of capital stock, and this without reference to the time, when the debts accrued, or when the
insolvency occurred, or at what time any particular ba/P: began to co tribute.
If this bank fund were to be marshalled upon the debts of an insolvent
bank according to the law of partnership, it is obvious, something of that kind
would have been provided for. It would certainly require a vex.: different
account of the proceedings, before the chancellor, from a mere statement
of the amount of indebtedness and of assets, - which is all that the statute
seens to zquire, preliminary to akin,- an order upon he chancellor.
The statute of 1840, which was enacted after the re-charter of the 3ank of
St. Albans, could have no effect upon its liability, and was not intended to have.
And the provision, tart banks subsequently chartered should not be liable to
contribute to pay the debts of banks, which had become insolvent before such
banks were chartered, was altogether a new provision, and enected with reference
to the Essex Bank, doubtless, and because it was apprehended, tat, without such
a provision, even banks subsekluently chartered must contribute to pay the debts
of that bank.
We think the writ must issue, and it is allowed.
•
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/
VhilmJAT
DAN8Y BANK v. STATE TilEamdnEit
(In Chancery)
Banks.
The Danby Bank was in business several years without contributing to
the bank fund, the directors giving bonds iust3ad for the security
of the bills and deposits. After 1856 the directors did not give
bonds but paid into the fund. Held, that the liability of the fund
attached at once upon the failure of the directors to give bonds.
Held, also, that the state treasurer was properly made a party to the
ap)lication for the fund.
Appeal from Chancery. The facts set forth in the petition, answer
and replication, and the decree of the court, made at the March term,
1864, Kellogg, Chancellor, are sufficiently stated in the opinion of
the court.
E. Edgerton, for the petitionee.
•
The four banks, that contributed the fund in question by C. S.,
Ch. 84, Sec. 6, are made its "owners," with the exception of that portion of it paid in by the Danby Bank; and one of these (The Farmers'
Bank) has already, under Sec. 13 of the same statute, claimed payment
of its share from the state treasurer. These banks should therefore
all be made parties to the present proceeding, that their respective
rights may be conclusively settled by such order as the court shall
make. Story's Eq. Pl. Sec. (:)7; Noyes v. Sawyer, 3 Vt. 160.
The Daby Bank prior to the payment to the state treasurer of apy
part of the $750. had suspended its redemptious and all its business,
and had finally failed and become insolvent, and although this payment
was not intended, probably, as a fraud, it nevertheless has that effect
upon the other safety fund banks, and should not subject them to the
payment of the Danby Bank debts. See C. S., Ch. 84, Sec. 6, 7 and 8.
Another point which the court are requested to consider, is, whether the directors of the Danby Bank, having given bonds as they did, pursuant to Section 46, p. 490 of the statutes up to the year 1856 could
subsequently make their debts a charge upon the bank fund, by neglecting
thereafter to renew their annual bonds. (Sec. 87, p. 495, C. S.) Especially when it does not appear when the insolvency actaally accrued.
The decree should have been made for the aaount of the bank fund
merely, 7thich is shown by the case to be but ;:13,125.
•
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Prout & Dunton, on the same side.
1. When the directors gave bonds for the redemption of the bills,
&c., the bank thereafter became exempt from all the provisions of the
statute relative to the bank fund. C. S., p. 495, Sec. 87,88,89.
It is absurd to contend that a bank might adopt this system of securing its bill holders and depositors by the bonds of its directors,
until it was in failing circumstances, then elect a new board of directors, and, by their neglect or refusal to give the requisite bonds for
the redemption of the bills and payment of the depositors, thereby charge
the bank fund.
As to the c.mstruction of statutes not explicit, see Kent 521, and
note and cases there cited.
This bank fund is the property of the banks that contributed it,
(see C. S., p. 482, Sec. 62) and its owners can only be divestea of it
by a strict compliance with the statute. Spear v. Ditty, 9 Vt. 283;
Brown et al. v. Wright, 17 Vt. 97; Chandler v. Spear, 22 Vt. b88; Culver
v. Hayden, 1 Vt. 364.
The Danby Bank has not complied with the statute. The directors
did not either give the requisite bonds or contribute to the bank fund,
until after the bank failed.
If true that the bill holders and depositors have no security if
their bank fund fails them, it does not alter the case. The equities
of the owners of this fund, are, to shy the least, equal to the equities
of the bill holders and other creditors of the brInk; and when the equities
are equal the law must prevail. 1 Story's Eq., p. 57; Fitzsimmons v. Ogden, 7 Cranch; Mitford Eq. Pl. 274.
G. W. Harman, for the receiver of Danby Bank, maintained that if the
directors give bonds for the payment of bills and deposits, such act exempts the bank from all payments to the "bank fund", but this exemption
exists only while the bonds are extant. The general provisions of the
statute make it the duty of the bank to contribute to the "bank fund".
The exception is that if the directors give the bonds to pay the bills
and deposits, while they are in office, the bank shall "thereafter"
be exempt from all payments to the "bank fund".
The court are called
term "thereafter" as used
limited to the period for
such is the only rational
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upon by construction, to give a meaning to the
in this statute. We claim that it should be
which the directors furnish their bonds; that
construction.
Should the decree of the court of chancery be affirmed, the cause
should be remanded, intrammelled by apy order which shall preclude the
receiver or creditors from a full examination of the state of the "bank
fund".
Peck & Fifield, for the creditors.
1. The act of 1840 permitting directors to give bonds is an exception to the general rule prescribed by Sec. 1, ch. 84. All banks are
safety fund banks unless the directors give bonds, &c. When therefore
the directors of this bank ceased to ,ive bonds they became ipso facto
a safety fund bank, and if the treasurer of the state omitted to collect
their contribution, it was the fault of the state and not of these creditors.
2. But in September, 1857, the bank paid its full contribution for
1656 and 1857 and took the state treasurer's receipt for it. This made
the bank a safety fund bank. It was competent for the state to waive
the payment of the contribution on the day it was due. Instead of asserting a forfeiture for this neglect they waived it and took the money.
I
3. The answer alleges that the bank suspended the redemption of
its bills, discontinued business and in fact failed before the payments
were made to the safety fund. The case, however, shows that the bank
elected directors in 1856 and 1857, kept up its organization, and made
the payments mentioned in 1857, so that business was not entirely discontinued. Most of the banks in the state did in 1857 suspend specie
payments and business. But,
4. Conceding all the answer claims, the bank would continue subject to the provisions of the safety fund act, until "it shall become
insolvent and have been proceeded against as hereinafter mentioned;"
Sec. 9, ch. 84. This bank could not be regarded as legally insolvent
within the meaning of the statute until it was proceeded against as
an insolvent corporation which was long subsequent to 1857. The 27th
and following sections of the act point out the manner in which insolvent banks shall be proceeded against, and until these proceedings are
commenced the corporation cannot be regarded as insolvent.
5. The Danby Bank then, being subject to the safety fund law,
the decree of the chancellor was right and in accordance with the 9th
section of chapter 84. Elwood v. State Treasurer, 23 Vt. 701.
•
Pierpont, J. This case comes before this court upon an appeal
from an order of the court of chancery, made in the course of proceedings instituted to settle up the affairs of the Denby Bank, as an insolvent banking institution.
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The order appealed from fixes the amount of debts against the corporation, the amount of assets applied towards the payment of such debts
and the balance still due; and directs the receiver, appointed to close
the affairs of said bank, to apply to, and receive from, the treasurer
of the state, in the manner provided by the statute, a sum sufficient to
pay such balance.
This order is based upon the supposition that the bank fund, so
called, in the hands of thetreasurer of the state, is properly applicable to the payment of the said deficiency.
Before proceeding to make the said order upon the treasurer, the
court of chancery caused said treasurer to be cited in, to show cause
why the order should not be made. The treasurer appeared before said
court, and resisted the making of the order, on the ground that the bank
fund in his hands cannot properly be applied to the payment of such deficiency. The decision of the court being adverse to his claim, he has
brought the question here by appeal. And the principal question now to
be considered is as to the correctness of the order in this respect.
The Danby Bank Nas chartered in 1850. By the statute of this state
then in force, every moneyed corporation having banking powers chartered
subsequent to 1831 were required on or before the third Thursday of October in ever,/ year, to Ay to the treasurer of the state a sum equal to
three-fourths of one per cent, on the capital stock of said corporation
paid in, (with certain exceptions not affecting this question) until
such corporation shall have paid into the treasury four and one-half
per cent, upon its capital stock, to remain a perpetual fund, to be denominated the bank fund, and to be inviolably ap.,:xopriated, and applied
to the payment of such portion of the debts, exclusive of the capital
stock, of any of said corporations that should become insolvent, as remain unpaid, after applying the property and effects of such insolvent
corporation towards the payment of its debts. See C. S. 481-2.
The legislature of this state at its session in 1540 passed an
act in relation to banks, in addition to the then existing law on the
subject, which is incorporated into the Compiled Statutes, in which it
was provided in section 8 of that act, and sections 56 and 57 of chapter
84 of the Compiled Statutes, that the directors of every bank, chartered
or re-chartered, at that or any subsequent session, should be liable to
pay to the creditors and stockholders of such bank, all losses sustained
in consequence of any violation, by them, of the provisions of that act,
or of any other law, or other unfaithfulness in the discharge of their
official duties; and to secure such liabilities, each of the directors
are required to execute a bond to the treasurer of the state, with sufficient sureties, approved by the bank commissioner, the aggregate amount
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of which bonds to be equal to the amount of the capital stock of such bank,
actually paid in. See Compiled Statutes, 490. The statute requires these
bonds to be executed, before the bank can go into operation, or the directors discharge the duties of their office.
By the 87th section it is provided that if the directors of any bank
corporation subject to the provisions of this chapter shAll execute bonds
to the treasurer of the state, to the amount and with the security required
in section 57, to be approved by the bank commissioner, and deposited with
said treasurer, conditioned that such directors shall at all times pay and
redeem according to law all the bills issued by such bank, and shall pay
and refund all deposits made in such bank, when such payments are demanded, while such directors are in office, such bank shall thereafter be
exempt from all payments, required to be paid in to the bank fund, and
from all the provisions for the establishment, ?reservation and regulation of said fund.
•
It appears that from the agreed facts in the case, when the Danby
Bank first went into operation in 1851, the directors executed bonds according to the provisions of the said 87th section, and continued so to
do, until the annual election of directors of said bank on the 2d Tuesday
in January, 1856, thus releiving the bank from the annual contribution
to the bank fund, as otherwise required by law. After the said second
Tuesday in January, 1856, the directors then elected did not execute
bonds as provided by said 87th section, but continued the operations
of said bank, and at a subsequent period, paid to the treasurer of the
state, for the benefit of the bank fund, the required annual contribution for the years 1856 and 1857, amounting to the sum of $750.
It is now insisted on the part of the state treasurer, that the
directors having once given bonds according to the provisions of section
87, and operated their bank under the system therein provided, a subsequent failure to execute such bonds does not leave the bank subject to
the provisions of the law relating to the bank fund, but only makes them
liable to be proceeded against, by the bank commissioner, in a court of
chancery, as an insolvent corporation.
In testing the correctness of this position, it must be borne in
mind, that the bank, when created, was made subject to the provisions
of the law relating to the bank fund. No act of the bank was necessary
to bring it within its provisions. It is not a case where it is necessary that the bank should make a choice, or take any action on the subject, to make its organization complete, or for the transaction of its
business. When the directors have executed the bonds as required by the
57th section, they are authorized to discharge the duties of directors,
and the bank to go into operation. The organization is perfect, and the
•
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cor2oration exists as a banking institution under the law, and is liable
to make its annual contribution for the benefit of the bank fund.
By the 87th section a method is provided by which the bank may become exempt from this liability to contribute, and that is by the directors giving bonds to redeem the bills of the bank, and pay the deposits,
while such directors are in office. The directors of the Danby Bank
having executed such bonds according to the provisions of this section,
the bank thereby became exempt from this liability. The question then
arises, for what length of time did that exemption continue? The natural
and common sense answer would seem to be, just as long as the facts, upon
which the exemption was based, continue to exist, and no longer; or in
other words, as long as the directors continued to execute such bonds;
and that when they fail so to do, the liability under the bank fund law
at once attaches, thus effecting the obvious purpose of the statute, that
is security to the bill holders, either by means of the bank fund, or the
directors' bonds.
•
But it is said that when the bonds are once executed, so that the
exemption exists, by the terms of the statute the exemption is made perpetual, the language being that "such bank shall thereafter be exempt,"
&c. The word "thereafter" in its ordinary signification has no future
limitation; but it is apparent that the word is not used in this section in that unlimited sense. To give it that meaning would defeat the
object the legislature had in view, which was to provide a security for
the redemption of the bills issued by the several banks in this state,
through the medium of the bank fund, or the bonds of the directors.
If when the bank is once exempt by reason of the bonds, they are
always thereafter exempt, the neglect of any board of directors, sUbsec,uently elected, to execute such bonds would leave the bill holders without any security for the redemption of the bills, beyond the ordinary assets of the bank, unless they could resort to the bank fund. Even if
such neglect would make the bank liable to be proceeded against as an
insolvent institution, that :ould afford no additional security to the
bill holders. kgain, the statute does not require the directors at any
time, or under any circumstances, to give bonds of this character. It
is optional with every board of directors to do it or not. When their
bonds arc once executed they stand as a substituted security to the bill
holders, in place of the bank fund, so long as those bonds continue in
force and operation as such security, which is in fact until the next
annual election of directors. Then such bonds cease to have that effect, and new bonds become necessary to the continuance of the exemption
.
If they are not executed, the bank resumes its original position and obligation, under the law creating and regulating the bank fund.
•
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We think it was the intention of the legislature, as evidenced by
the language of the said 87th section in connection with the spirit and
purpose of all our legislation upon this subject, to exempt the banks
from contribution to the bank funa, so long as the directors of said
banks should furnish security for the redemption of their bills, and
the payment of depositors, by bonds executed according to the provisions
of said section, and no longer; and that the word "thereafter" as used
in that section should be taken and considered in that sense.
•
It is said that under this view of the statute the directors of a
bank that is in eMbarraased circumstances may, by neglecting to execute
bonds, Take the bank fund chargeable with the redemption of their bills,
when said bank has never contributed anything to said fund, and this is
to the prejudice of tnose banks which had contributed. If this be so
the fault is with the legislature, and this court cannot remedy the evil.
The legislature in all these provisions was seeking to protect the bill
holders, rather than those who shollld contribute to the fund. But the
liability of the fund to redeem the bills of a particular bank is not
made to depend upon the fact, whether the bank has contributed much or
little to the fund, or at all. If the bank had never contributed to the
fund, or its directors executed bonds under said 87th section, and the
proper authorities had neglected to discharge their duties, and the bank
had continued its business until it failed, it will hardly be contended,
I apprehend, that the fund would not be liable.
question has been raised as to the propriety of making the treasurer of the state a party to this application. Whether to do so was the
only proper course, it is not necessary now to inquire. We certainly
see no impropriety in making him a party. The bank fund is in his hands;
he is the keeper, and the only person who has any control over it; he
represents the state in the matter. The object of the application was
to obtain an order of the chancellor directing the treasurer to pay the
bank fund in his hands to the receiver. On notice to him he appears and
objects to the granting of the order on the ground that the creditors have
no claim upon the fund, for the reasons which we have been considering.
This it *as clearly competent and proper for him to do. And probably there
was no method by which this question could be so readily and economically
settled as that adopted, and the chancellor v:as clearly right in entertaining it.
•
No question could arise upon this application of the receiver, as to
the amount of the ban: fund in the hands of the treasurer, the source
from which it came, or the claims of others, if any, upon it. All questions of such a character, if they arise, must be settled in the course
of other proceedings instituted for that purpose. The only question to
be settled here is as to the right of the receiver to resort to this fund,
and the amount which he is entitled to apply for, End recover, from the
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treasurer. These questions settled in his favor, the order follows as
a matter of course. All this would be necessary if there was no money
in Lhe hands of the treasurer belonging to the bank fund -- the statute
pointing out the course to be pursued in such a case.
The decree of the chancellor is affirmed and the case remanded.
•
•
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Decision of the Supreme Court of Vermont.
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2r, (
7c f,2
November_, 1866.
Receiver of Danby Bank v. State Treasurer.
Banks. Bank Fund. State Treasurer.
Pi.actice.
Venue.
The bond provided for in paragraph 87, ch. 84, p. 495, C. S., is a
mere substitute for the liability and duty of the bank to pay in towards
the Bank Fund, for its creation or replenishment; and the giving of such
bond has no effect upon the fund already accumulated, nor upon the right
of the bank to draw out its proportionate share of it.
When a bank ceases to do business in consequence of its insolvency,
the Bank Fund then become chargeable for the indebtedness of the bank in
excess of its property and effects.
It is the duty of the State Treasurer to Pay over to a receiver of
an insolvent bank so much of the Bank Fund as may be in the hands of the
Treasurer under the statute, and necessary to 1387 such indebtedness, upon
the order of the court of chancery.
The Treasurer holds the money constituting the Bank Fund as a specific fund in which the State has no property, and he is charged with special duties in respectthereto; therefore upon petition of a receiver for
a writ of MANDAidaiS to compel the Treasurer to pay over said fund, pursuant to a decree of the court of chancery, the order should not require
him to pay to the heceiver any money of the state as distinguished from
the Bank Fund; nor should it require him to pay money of his own, on the
score of his having subjected himself to liability for the deficit of
that fund by reason of his having wrongfully paid it over to banks not
entitled to have it.
The Receiver properly instituted this proceeding in the county of
his personal residence, although the former decree was obtained in another county in which the bank v.as located.
PETITION FOR MANDAbilUS. The petition was dated December 22d, 1865,
and was addressed to the Bennington county supreme court, January term,
1866.
The petitioner, A. L. Miner, of Manchester, in said county, represents that the lianby Bank was enjoined by the court of cha:xery, on the
29th day of December 1857, that he wqs appoiited receiver of said bank,
on the same day, and that one year from that date was allowed by the
chancellor for the creditors of said bank to present their claims to the
petitioner, as such receiver, for allowance.
There was an unpaid balance due the creditors upon claims allowed
by the receiver, after applying the assets of the bank towards the pay
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ment of said claims under direction of the chancellor, to the amount of
$54,623.48, including interest.
The Danby Bank having contributed to the bank fund, as required by
law, the receiver, on the 14th day of January, 1864, applied to the court
of chancery for an oraer that tne treasurer of the state, should pay to
the receiver a sum sufficient from the bank fund to satisfy the claims
against the Danby Bank, which have been allowed.
•
The hearing on said application was continued from time to time, until the 27th day of April, 1864, when the state treasurer filed his written answer, that there was in the treasury, belonging to, and being such
bank fund, the sum of $13,125., exclusive of interest, and that of that
sum, the Danby Bank had contributed the sum of 050.00; the Battenkill
Bank, at Ianchester, $2,225.00; the Poultney Bank, at Poultney, $2,225.00;
the Farmers' Bank of Orwell, ;,4,500.00; the Bank of Newbury, at Wells
l'iver in Newbury, $3,375.00. Whereupon the court of chancery made an order and decree in compliance with the ap. lication, from which the treasurer appealed to the supreme court. And at the iutland County January
Term, 1865, the appeal was entered, a hearing had thereon, the decree of
the court of chancery affirmed, and the case remanded. And on the 25th
of August, 1865, the court of chancery made a final order in accordance
with the decision of the supreme court.
The receiver, on the 26th day of August, 1865, filed with Hon. John
B. Page, the state treasurer, a duly certified copy of said last mentioned decree, and demanded the amount of money specified in said decree, for
the purpose aforesaid. Thereupon the said treasurer paid to the said receiver the sum of $7,380.00, being the amount contributed by the Danby
Bank, the Battenkill Bank, and the Bank of Newbury, with the interest
which had accumulated at that time, and refused to pay the receiver any
further sum.
The receiver further represents that there was then in said treasurer's custody, the amount contributed by the Farmers Bank, of Orwell,
and the Bank of Poultney, at Poultney, to said bank fund, the sum of
$7,532.00, including interest on the same since the time interest had
been paid to the said banks. And the receiver further says, that in the
year 1655, the state treasurer made his annual report to the auditor of
accounts, that there was then in the said bank fund the sum of . . • •
$29,400.44
And that there was paid into said fund in the
year 1855, after said report was made
the sum of
718.75
Also in the year 1856, the sum of
134.50
Also in the year 1857, the sum of
750.00
Making an aggregate sum of
$31,CO3.6
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Which by the statute laws of this state, should have remained in
the state treasury, a perpetual fund, to be inviolably appropriated to
the payment of such portion of the debts, exclusive of the capital stock,
of any corporation which should become insolvent, as remained unpaid,
after applying the property and effects of such insolvent corpo.ation.
And the receiver further says, that a former state treaaurer, in the
year 1849, refunded and paid back from said bank fund, to the Stark Bank
of Bennington, the sum of $186.81; also, in the same year, to the Black
River Bank, at Cavendish, the sum of 4600.00; all of which was paid without the authority of law, and should have remained in the treasury as
aforesaid, which two sums being added to the above sum, makes the sum of
$31,492.50.
And the receiver says, that a former state treasurer had refunded
or paid back to the following banks, from the said bank fund, the several sums as below specified:
To the Bank of Brattleboro, in 1855
To the Bank of Vergennes, in 1856,
To the Bank of Bellows Falls, in 1858
S
43,156.25
4,500.00
4,500.00
All of which re-agyments were made to saia banks without the authority of law, and in violation of the provisions of the statutes; and
said fund should have remained inviolably in the state treasury for the
purpose aforesaid.
The said Miner, receiver of Danby Bank, prays the court that a peremptory writ of mandamus may issue, commanding the said John B. Page,
treasurer, to pay to the said Miner, as such receiver, the sum above
mentioned, in the decree of the court of chancery made on the 25th day
of August, 1865, as aforesaid, that the same maybe applied in payment
of the debts allowed against the Danby Bank, as aforesaid.
The said John B. Page, state treasurer, represented in his answer
to said petition, that he based his refusal to pay said receiver any
further sum at the time demanded, upon the fact (of which he then apprised said receiver,) that the Farmers' Bank of Orwell, and the Bank
of Poultney were claiming the balance of said bank fund the remaining
in his hands, and had notified him of their claims.
•
After stating the account of the bank fund from 1854, as taken from
the state treasurers' books, the said Page set forth that on the 17th of
October, 1860, he received from his predecessor in office on account of
said bank fund the sum of 413,125.00, which comprised the entire bank
fund which ever came into his hands, except interest that had accrued
thereon. It further appeared in the ansv,ers of the banks named, to
said petition, that October 8, 1855, the directors of the Bank of Brattleboro, and October 8th, 1656, the directors of the Bank of Verennes,
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and September 17th, 1857, the directors of the Bank of Bellows Falls,
and in the year 1849 the respective directors of the btark Bank, and
the Black River Bank, respectively executed bonds to the treasurer of
the state in conformity with the provisions of section 57 and 87 of the
Compiled Statutes, to secure the payment of the bills issuea, and the
debts of said banks respectively; and on the occasion of issuing and depositing said bonds, each of said banks withdrew its proportional share
of said bank fund, and the same was paid over to said bunks by the state
treasurer.
It appeared from the answer of £1. Clark, agent of the Bank of Poultney, that the charter of said bank expired on the first day of January,
1557, but was extended for the purpose of closing its concerns, by several acts of the legislature, until first of January, 1866. And the
said bank claimed that said acts of the legislature did not affect its
right to withdraw from the bank fund at the time of the expiration of
its charter in 1857, its contributions to said funa, but that the then
state treasurer, H. M. Bates, refused upon demand, September 5d, 1859,
to pay over the same.
•
And the answer of said Clark further said that the said receiver did
not file his application for said bank fund as above set forth, until
January, 1864.
And further answering the defendant said that the Danby Bank was located and did business in Danby, in the county of hutland, and that all
the prior proceedings instituted for the purpose of closing up the affairs of said bank, were in the court of chancery, in and for the county
of Rutland, and that the proceedings in this suit were supplemented
thereto, and should have been preferred in the supreme court, in and for
the county of Rutland; and these petitionees insisted that said petition
should, also, for that reason be dismissed.
The answer of the Farmers' Bank, of Orwell, was substantially like
that of the Bank of Poultney; both banks insisting upon their right to
demand and receive from the treasurer their respective contributions to
the bank fund, on the ground of there being no legal charge thereon in
favor of the creditors of Danby Bank, at the time of the expiration of
their respective charters. The charter of the Farmers' Bank expired
January 1st, 1864. The charters of the said Bank of Brattleboro, Bank
of Vergennes, Black hiver Bank, and the Stark bank, are still in life
and full force.
•
It was further claimed in the answer of the National Bank of Vergennes as a cause for dismissing said petition; that in 1653 it_sus provided by an Act of the legislature, that at the expiration of its then
running charter, on the first day of January, 1856, the said bank should
be reopganized; that all of its,old affairs should be adjusted and its
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capitA. increased, and that in pursuance of said Act the contribution of
said bank Lo the bank fund, was appraised as assets, and a dividend to
stockholders was made, based upon said appraisal, whereby the sum of
4,500., which constituted said contribution, was appropriated and exhausted for the benefit of retiring stockholders under the direction of
a committee of the legislature; and thereupon the directors of the reorganized bank, gave bonds as required by law for the redemption of bills,
etc. Other facts upon this point are omittdd, as the question raised
thereon is not decided in the opinion. This defendant also raised the
question of jurisdiction, which was raised by all of the banks, but not
by the treasurer.
Other facts are stated in the opinion.
A. L. Miner and Peck & Fifield, for Petitioner.
G. W. Harmon, for petitioner and Creditors.
E. Edgerton, for State Treasurer.
George F. Edmunds, for National Bank of Vergennes.
•
Prout & Dunton, for Farmers' bank and Bank of Poultney.
C. H. Chapman, for Bank of Black River.
The opinion of the court was delivered by
Barrett, J. For the purposes of this proceeding, we think it was
proper for the receiver to Lnstitute it in the county of his personal
residence. This is not a continuation, by way of supplement, of the
original proceeding under the statute, in such a sense that the venue
of that proceeding draws to it and fixes the venue of this petition.
Of course, then, the venue depends on the general provisions of the
statute, and by them the receiver properly instituted the proceedings
in the supreme court in and for Bennington county.
The several banks interested in the "bank fund" under the claim of
the receiver, were notified of the petition, and they have appeared and
been heard in an argument upon issues and questions made by their respective answers, as also has the treasurer. The court therefore not only
feel at liberty, but in view of the character of the case and of the interests connected therewith, it would seem to be a duty, to express opinions on some points beyond what would be necessary for thepresent disposition of the case by the order to be made.
•
The mode of creating the "bank fund" and of continuing and replenishing it, in connection with the purposes for which it was created,
and the provisions for administering it, shows clearly that it was de-
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signed to be and remain perpetual, subject to the purposes and provisions
of the law. The statute provides only two modes for appropridting and
withdrawing money from that fund: One in payment of the debts of an insolvent bank; the other, -- in sec. 13 of the chapter on Banks in the
Compiled Statutes, -- in repayment to a bank, of which the charter has
expired, its proportional share of said fund. Section 87 does not provide anything in relation to the appropriation of said fund, nor as to
the rights of the banks in it. It provides that on giving a certain
bond the bank shall thereafter be exempt from all payments required to
be made to the "bank fund", "and from all the provisions for the establishment, preservation and regulation of said fund", The court reaard
this exemption as prospective, commencing with the giving of the required bond and continuing only so long as such bond shall be kept good.
In other words, the bond provided for in the 67th section is a mere substitute for the liability and duty of the bank to pay in towards the
"bank fund" for its creation or replenishment; and the giving of such
bond has no effect upon the fund already accuOulated, nor upon the right
of the bank of draw out its proportionate share of it.
S
The exemption "from all the provisions for the establishment, preservation, and regulation of the fund", was designed to be only coextensive, in the time of its operation, and in respect to the subject matter
on which it was to operate, with the exemption from all payments to said
fund, revired in said chapter to be made. .
None of the banks, therefore, that had contributed to that fund,
were entitled, by reason of having given the required bond, to withdraw
what they had paid in towards that fund pursuant to the provisions of
that chapter. The right to do so accrued only upon the expiration of
the charters of the several banks respectively. The purpose of creating
the fund was to provide a security for, and a means of paying the balance
of the indebtedness of a bank that had become insolvent in excesi of its
property and effects. That balance would of course depend on the amount
of its debts, and the amount of money to be realized from the property
owned by it at the time it ceased to do business in consequence of its
insolvency. In view of the purpose for which the fund was created, it
seems plain that the fund must be chargeable for the balance of such
debts as of the time when the banK ceased to do business by reason of
its insolvency. The proceedings in the court of chancery, required by
the law to be instituted upon the happenings of such insolvency, are for
the purpose of ascertaining the extent to which the fund is to be subjected, and to appropriate it accordingly. This being so, none of the
banks that had c-mtributed to the fund, now claimed by the receiver,
were entitled to withdraw their contribution thereto, by reason of the
expiration of their respective charters, unless it be the Vergennes Bank,
for it stands confessed that none of their charters had expired at the
time Danby Bank stopped business on account of being insolvent.
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Whether the charter of the Vergennes Bank is to be regarded as
having expired at that time, and therefore said bank was eatitled to
have any money repaid, as it has been, it is not now necessary, nor
perhaps important, that the court should express an opinion. The matter stands upon the peculiar provisions of the acts by which that banks
has been kept on foot, and the coarse taken uader those acts for continuing it, either as the old bank extended, or as a new one, absorbing and
standing in the place of the old one. It seems more appropriate to leave
the decision of the question till it shall become necessaiv under some
proceeding that shall raise the issue directly between the proper and
necessary parties to it.
It is obvious from what has now been said, that, in the opinion of
the court, it is the right of the receiver to have, and the duty of the
treasurer to pay over to him so much of the "bank fund" as is now in the
hands of the treasurer under the statute, charged by the order of the
court of chancery. To this extent the court have no doubt that a peremptory writ should issue.
•
But it is claimed that, under the law, it should be held that the
whole amount of that fund is in the hands of the treasurer, undiminished
by the payments that have been made to the banks named of the proportions they had respectively contributed to said fund. The soundness of
this claim depends on the real character in which the treasurer receives
and holds the money which goes to constitute the "bank Fund". If it
be a receiving and holding of the money as the property of the state,
the same as he receives and holds the money that is paid into the treasury by the collectors of taxes, that is to say, if it be money of the
state, subject indiscriminately with the money derived from taxation,
to a special charge by a permanent general law, and an appropriation by
virtue of such charge to the satisfaction thereof, then it would follow
that the treasurer should pay over to the receiver, of the money in the
treasury, indiscriminately to the full extent of money in his hands as
treasurer, not exceeding the extent of such charge. But, in the opinion
of the court, this is not the correct view to be taken of the subject.
We think the treasurer holds the money as a specific fund in which the
state has no property. He is charged with special duties in respect to
that fund, and becomes officially responsible for the proper discharge
of those duties. Whether in virtue of his official responsibility, and
his liability under his official bond to respond for his official defaats, the state sustains such a relation as to render it, in supposable cases, its duty to make good any deficiency in the "bank fund", the
court are not called on to decide or express views. For present purposes
it need only be added, that all the provisions of the statute upon the
subject, preclude the idea of that fund being absorbed b the state as a
part of its general assets, with only the duty on the part of the state
to permit an equal amount to be taken from the treasury to asnwer the
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•
purposes of the statute as to that fund. The statute provides for an
entire separation of the fund; for its investment by the treasurer;
for its recall by him or its replacement by the sale of securities
which he has received by way of investment; and, moreover, it expressly
declares that it shall be the property of the several banks that have
contributed to its creation. lhere is no provision for the treasurer to
supply any deficiency in that fund at any time, or for any purpose, by
transferring the moneys of the state in his hands to the account of
said
fund. To supply the money to meet the charges unon the fund the only
mode is by the sale of the securities, a collection of the loans, and a
resort to further contributions by the banks, as privided in the statute
.
Hence, it is obvious that, in order to warrant the treasurer to appropr
iate the money of the state to the purposes of the "Bank Fund", special
authority, by act of the legislature, would be necessary. The order,
therefore, by mandamus should not require him to pay to the receiver any
money of the state as distinguished from the "bank fund". In the opinion
of the court, also, such order should not require him to pay money
of his
own, on the score of his having subjected himself to liability for
the
deficit of that fund b.; reason of his having wrongfully paid it over
to
banks not entitled to have it. In the first place this is not
the appropriate proceedings in
to make the issue and try the question of his
liability on this score. In the next place the order can properl
y extend only to require him to do what it is his clear ministe
rial duty to
do. That ministerial duty must be regarded as limited to the
paying over
of the funds in his hands. hhether he may be liable to respond in damages for official or personal default, can properly be determined
only
by a different proceeding, and if so liable, the final remedy would be
oy process to enforce pecuniary satisfaction by payment of the adjudged
damages.
But in the present case, a coaclasive reason for limiting the order
exists in the fact that the present treasurer has had nothing to do
with
the "bank fund", except to receive from a predecessor the sum no. in
his
hands, and no more, and that predecessor, (Hon. John B. Page,)
passed to
the present treasurer, all that he received from H. M. Bates, a former
treasurer, except what he has paid to the receiver under the order
of the
chancellor. The amount of the fund, in the accumulation and disposi
tion
of it since 1854, and the present condition of it, are set
forth in the
answer of said John B. Page, which is adopted and supplemented
by the
present treasurer; by which it appears that all the requirements
made to
the the vaious banks thqt had contributed to the fund, were made
by Mr.
Bates while he was treasurer. John B. Page stands therefore clear
of any
ground or reason for imputing to him official fault or misjudg
ement in
this respect; and, in view of the facts set forth in his answer
constituting the reason for his withi,olding from the recei,-er the balance
of the
fund claimed by the Farmer's Bank and the Bank of Poultney, there
seems
to be no ground for imputing to him any personal shortcoming in
thus
withholding that balance. The same remarks apply as well to
the present
Treasurer.
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Federal Reserve Bank of St. Louis
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•
It is therefore adjudged that a write issue in due form, commanding
John A. Page, breasurer of this state, to pay over, under the said order
being the amount of the "bank
made by the chancellor the sum of
fund" in his hands as treasurer, after deducting therefrom the sum paid,
or to be paid, to their counsel by the said John A. and John B. Page,
for the reasonable charges of such counsel, for the reasonable charges
for such counsel, for appearing and answering in court to said petition,
to be fixed and allowed by the chancellor by whom the original ordet upon
the treas_irer to pay over the bank fund to said receiver was made."
•
•
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Federal Reserve Bank of St. Louis
Decision of the Supreme Court of Vermont.
November, 1866.
Receiver of Danby Bank v. State Treasurer.
Banks.
Bank Fund.
State Treasurer.
Practice.
Venue.
The bond provided for in paragraph 87, ch. 84, p. 495, C. S., is a mere
substitute for the liability and duty of the bank to pay in towards the
Bank Fund, for its creation or replenishment; and the giving of such bond
has no effect upon the fund already accumulated, nor upon the right of the
bank to dral, out its proportionate share of it.
When a bank ceases to do business in consequence of its insolvency, the
Bank Fund then becomes chargeable for the indebtedness of the bank in excess
of its oroperty and effects.
It is the duty of the State Treasurer to pay over to a receiver of an insolvent bank so much of the Bank Fund as may be in the hands of the Treasurer
under the statute, and necessary to pay such indebtedness, upon the order of
the court of chancery.
111
The Treasurer holds the money constituting the Bank Fund as a specific fund
in which the State has no property, and he is charged with soecial duties in
resoect thereto; therefore u2on petition of a Receiver for a writ of MANDAMUS
to compel the Treasurer to pay over said fund, pursuant to a decree of the cour'
of chancery, the order should not require him to pay to the Receiver any money
of the state as distinguished from the Bank Fund; nor should it require him to
pay money of his own, on the score of his having subjected himself to liability
for the deficit of that fund by reason of his having wrongfully paid it over to
banks not entitled to have it.
The Receiver Properly instituted this proceeding in the county of his persona_
residence, although the former decree was obtained in another county in which the
bank was located.
PETITION FOR MPA1LMUS. The petition was dated December 22d, 1865, and was
addressed to the Bennin7ton county suoreme court , January Term, 1866.
The petitioner, A. L. Miner, of Manchester, in said county, represents that
,
, of Dec.1357,
the Danby Bank was enjoined by the court of chancery, on the 29th da,
that he was appointed receiver of said bank, on the same day, and that one year
from that date was allowed by the chancellor for the creditors of said bank to
oresent their claims to the oetitioner, as such receiver, for allowance.
There was an unpaid balance due the creditors upon claims allowed by the receiver,
after applyin the assets of the bank towards the payment of said clal
•
under direction of the chancellor, to the amount of 454,623.48, including
interest.
The Danby
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Federal Reserve Bank of St. Louis
Bank having contributed to the bank fund, as required by law,
the receiver, on the 14th day of January, 1864, applied to the court of cl eery for an order that the treasurer of the state, should pay to the receiv r
a sum sufficient from the bank fund to satisfy the claims against the Denby Bank,
which have been allowed.
The hearing on said apulicetion was continued from time to time, until the
27th day of Anril, 1864, when the state treasurer filed his written answer,
that there was in the treasury, belonging to, and being such bank fund, the sum
of a3,125., exclusive of interest, and that of that sum, the Denby Ban:: had
contributed the sum of $750.00; the Battenkill Bank, at Manchester, $2,225.00;
the Poultney Bank, at Poultnei, $2,225.00; the Farmers' Bank at Orwell, $4,500.00;
the Ban: of Newbury, at e1ls Liver in Newbury, 4'3,375.00. Whereupon the court
of chancery eade an order and decree in compliance with the applicntion, from
which the treasurer appealed to the supreme court. And at the Rutland County
Janunry Teri, 165, the ti,eal Was entered, a hearing had thereon, the decre,
of the court of chancery affirmed, and the case remanded. And on the 25th o
August, 1865, the court of chancery made a final order in accordance rith tIL
decision of the supreme court.
4,
The receiver, on the 26th day of Auust, 1865, filed vdth Hon. John B. Page,
the state treasurer, a duly certified copy of said last mentioned (
demanded the amount of money specified in said decree, for the pur
Thereupon the said treasurer paid to the said receiver the sun of t71 ,30.
being the amount contributed by the Denby Bank, the Battenkill Bank, and the nz
of Newbury, with the interest which had accumulated at that time, and refused to
pay the receiver any further sum.
The receiver further repres - nts that there was then in said treasurer's Cu:
the aneunt contributed by the Farmers Bank, of urwell, and the Ber-4 of Poult
at Poultney, to said bank fund, the sum of ;,7,532.00, including interest on
same since the time interest had been paid to the said banks. And the receiver
earlr+
further says, that in the yetr 1855, the state treesurer made his annul r,
the
fund
bank
said
the
in
then
was
there
that
accounts,
of
auditor
the
to
;!29,400.44
of
And that there was aid into said fund in the
year 1855, after said reeort was mtde
718.75
the sum of
134.50
Also in the year 1856, the sum of
750.00
Also in the yetr 1857, the sum of
4=1 nn7 rn
Makin' an aggregate sun of
Which by the statute laws of this state, should have remained in the state
treasury, a oerpetual fund, to be inviolably appropriated to the pament of .
portion of the debts, exclusive of the capital stock, of any such corporation
should become insolvent, as remained unneid, after applyine- the ,r ,-/-1rrid effects of such insolvent corPorntion.
,..10
•
the receiver further says, that a former state treasurer, in the year 184e,
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Federal Reserve Bank of St. Louis
of
bei
P sum of
. lould have
,
added to the above s
n the
, makes the sum of -
And the receiver says, that a former state treasurer had refunded or paid
'
7
back to the folov;ing banks, from the said bank fund, the severe"
below specific :
To the Bank of .brattleboro, in 1855,
4,500.00
To the Bank of Vergennes, in 1856,
4,500.C(
To the Bank of Bellows Falls, in 1858
All of which re- ayments were made to said banks without the tuthori
rici in violation of the provisions of the statutes; and said fund e_e,
have remeined inviolab1y in the state treasury for the purpose aforesaid.
•
The said. Miner, receiver of Denby Bank, prays the court that a peremptere Trl_t
of mandamus may issue, commanding the said John B. Page, treasurer, to pc
to the said Miner, as such receiver, the sum above mentioned, in '
of the court of chancery made on the 25th day of August, 1865, as
that the serer, may be applied in eayment of the debts allemed
Denby Bank, as aforesaid.
The said John B. Page, state treasurer, represented in his answer to
.
petition, that he based his refusal to pay said receiver any further Lethe time demanded, upon the fact (of which he then aprised said rece4,7er,)
that the Farmers' Bank of Orwell, and the Bank of Poultney were cle
balance of said bank fund the remaining in his hands, and had notifieu nll
their claims.
After stating the account of the bank fund from 1854, as taken from the state
treasurer's books, the said Page set forth that on the 17th of October, 1860, received from his predecessor in office on account of said bank fund the suns
of t1Z,125.00, which oomorised the entire bank fund which ever came into his
It further apoeared in the
hands, except interest that had accrued thereon.
8, 1855, the directors
October
tat
petition,
answers of the banks named, to said
of the Bank
directers
the
185O,
8th,
and
October
of the Bank of Brattleboro,
-Pe
the
of
directors
the
1857,
17th,
of Verg,ennes, and Seetember
Falls, and in the year 1849 the respective directors of the St: .
'ne Elack Elver Bank, respectively executed bonds to the treasurer of the state
in conformity with the provisions of sections 57 and 87 of the Comniled Ste:
to secure the nayment of the bills issued, and the debts of BC
:sctively; and on the occasion of issuing and depositing said
said banks withdrew its proportional share of said bank fund, and the
paid over to said banks by the state treasurer.
It apeeared from the answer of M. Clerk, agent of the Bank of Poultney, that
the charter of said bank exeired on the first day of January, 1857, but was
extended for the luneose of closin- its concerns, by several acts of the legi:
lature, until first of Januery, 1866. And the said bank claimed that said
acts of the legislature did not affect its right to withdraw from the bank fund
at the time of the expiration of its charter in 1857, its contributions to saiC
Bates, refused lee-,'lera-el,
fund, but that the then state treasurer, H.
410
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Federal Reserve Bank of St. Louis
7
SeTtember 5d, 1859, t(
And the anslwr of said CJ•
filn
annliention for s)
1
“-,
„tn
!nn !_ither answering the defendant sa
and did business in Danby, in the county of Rutland, and that all the IA-innroceedings instituted for the purpose of closinn UT) the affairs of said
were in the court of cllancery, in and for the county of rutiand, and that.
proceedings in this suit were sun-le, ented thereto, and should have been
preferred in the suoreme court, in and for the county of Rutland; and th(,
''netitionees insisted that said petition ho
dismissed.
•
unzn,
The answer of the Farmers' Bank, of Orwell, was substnntinnthe Bank of Poultney; both banks insisting upon their right to demand and
receive from be treasurer their resnective contributions to the bank fund, on
the ground of there being no legal charge thereon in favor of the creditors
of Denby Bank, t the time of the expiration of their resnective charters. 7!
charter of the FarJers 1 Bank expired January 1st, 1864. The charters of thE
said Bank of Brattleboro, Bank of Vergennes, Black River Bank, and the Stark
Bank, are eaeh still in life and full force.
It was further claimed in the answer of the Aational Bank of Vergennes as a
cause for dismissing said netitiop.; that in 1853 it was provided by an Act
of the legislature, that at the exniration of its then running charter, on
the first day of January, 1856, the said bank should be reorganized; that
all of its old affairs should be adjusted and its canital increased, and that
in pursuance of said Act the contribution of said bank to the bank fund, was
appraised as assets, and a dividend to stockholders was nade, based upon said
appraisal, whereby the sum of $4,500., which constituted said contribution,
was approprieted and exhausted for the benefit of retiring stockholders under
the direction of a committee of the lerislature; end thereunon the di.•-'
of the reorganized bank, gave bonds as required by law for the reder .
.
bills, etc. Other facts unon this point are omitted, as the qnestion
ouestion
the
thernon is not decided in the opinion. This defendant also raised
of jurisdiction, which was raised by all the banks, but not by the treasurer.
Other facts are stated in the opinion.
A. L. Miner and Peel- & Fifield, for Petitioner.
G. W. Farmon, for Petitioner and Creditors.
F. Edgerton, for State Treasurer.
George F. Edmunds, for National Bank of Vergennes.
411
Front & Dunton, for Farmers' Bank and Bank of foultne2,.
C. Fin
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Federal Reserve Bank of St. Louis
Cha)mnn, for Bank of Black River.
- 7The opinion of the court was delivered by
Barrett, J. For the purposes of this proceeding, we think it was pro-,er
for the receiver to institute it in the county of his personal nsidence.
This is not a continuation, by way of supolement, of the oririnol proceeding
under the statute, in such a sense that the venue of that proceeding draws to it
and fixes the venue of this petition. Of course, then, the venue depends on
the general -rovisions of the statute, and by them the receiver prooerly instituted the proceedings in the supreme court in and for Bennington county.
The several banks interested in the "bank fund," under the claim of the
receiver, were notified of the Petition, and they have ap,eared and been
heard in an argument upon issues and questions made by their respective answere.
as also has the treasurer. The court therefore not only feel at liberty, but,
in view of the character of the case and of the interests connected therewith,
it would seem to be a duty, to express opinions on some points beyond what
would be necessara for the present disposition of the case by the order to be
made.
I
The mode of creating the "bank fund," and of continuing and replenishing it,
In connection with the purposes for which it was created, rnd the provisions
for administering it, shows clearly that it was designed to be and remain perpetual, subject to the purposes and provisions of the law. The statute provides
only two modes for appropriating and withdrawing moneyfrom that fund: one in
payment of the debts of an insolvent bank; the other, - in sec. 13 of the chapter
on Banks in the Compiled Statutes, - in repayment to a bank, of which the charter
has expired, its prouortional share of said fund. Section 87 does not provide
anything in relation to the appropriation of said fund, nor as to the rights
of the banks in it. It provides that on giving a certain bond the bank shall
thereafter be exempt from all payments required to be made to the "bank fund,"
"and from all the provisions for the establishment, preservation and regulation
of said fund." The court regard this exemption as prospective, commencing with
the giving of the required bond and continuing only so long as such bond shall
be kept good. In other words, the bond provided for in the 87th section is a mere
substitute for the liability and duty of the bank to pay in towards the "bank
fund" for its erection or replenishment; and the giving of such bond has no
effect upon the fund already accumulated, nor upon the right of the bank to
draw out its proportionate share of it.
The exemption " from all the provisions for the establishment, preservation,
and regulation of the fund," was designed to be only coextensive, in the tine
of its ooeration, and in respect to the subject matter on which it was to operaia.
with the exemption fro;. all Payments to said fund, required in said chapter to
hr,
11oue of the banks, therefore, that had contributed to that fund, were entitled,
by reason of having given the required bond, to withdraw what they had paid in
towards that fund pursuant to the provisions of that chapter. The right to do so
accrued only upon the expiration of the charters of the several banks respectivel:,.
41/ The Purpose of creating the fund was to provide a security for, and a means of
paying the balance of the indebtedness of a bank that had become insolvent in
excess of its property and effects. That balance would of course depend on the
amount of its debts, and the amount of money to be realized from the property
o7ned
by it at the time it ceased to do business in consequence of its insolvency.
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Federal Reserve Bank of St. Louis
— 8 —
In view of the nurpose for which the fund was created, it see-..s ,lain that
the fund must be chargeable for the balance of such debts as of the time whe,
the bank ceased to do business by reason of its insolvency. The proceedings
in the court of chancery, required by the law to be instituted upon the
happenings of such Insolvency, are for the purpose of ascertaining the extent
to which the fund is to be subjected, and to appropriate it accordingly. This
being so, none of the banks that had contributed to the fund, now claimed by
the receiver, were entitled to withdraw their contribution thereto, by
reason of the expiration of their respective charters, unless it be the Vergennes Bank, for it stands confessed that none of their charters had expired
at the time Danby Bank stopped business on account of being insolvent.
Whether the charter of the Vergennes Bank is to be regarded as having expired at that time, and therefore said bank was entitled to have the money
repaid, as it has been, it is not now necessary, nor perhans important, that
the court should express an opinion. The matter stands upon the peculiar
provisions of the acts by which that bank has been kept on foot, and the course
taken under those acts for continuing it, either as the old bank extended, or
as a new one, absorbing and standing in the place of the old one. It seems mor
appropriate to leave te decision of the question till it shall become necessary
under some proceeding that shall raise the issue directly between the proper
and necessary 1)arties to it.
•
•
It is obvious from what has now been said, that, in the opinion of the court,
it is the right of the receiver to have, and the duty of the treasurer to pay
over to him so much of the "bank fund" as is now in the hands of the treasurer
under the statute, charged by the order of the court of chancery. To this
extent the court have no doubt that a peremptory write should issue.
But it is claimed that, under the law, it should be held that the whole
amount of that fund is in the hands of the treasurer, undiminished by the payments that have been made to the banks named of the proportions they had
respectively contributed to said fund. The soundness of this claim denends on
the real character in which the treasurer receives and holds the money which
goes to constitute the "bank fund." If it be a receiving and holding of the
as the property of the state, the same as he receives and holds the money tat
is paid into the treasury by the collectors of taxes, that is to say, if it be
money of the state, subject, indiscriminately with the money derived from taxation, to a special charge by a permanent general law, and an appropriation by
virtue of such &large to the satisfaction thereof, then it would h follow that
the treasurer should pay over to the receiver, of the money in the treasury, indiscriminately to the full extent of money in his hands as treasurer, not exceeding the extent of such charge. But, in the opinion of the court, this is
not the correct view to be taken of the subject. We think the treasurer holds
the money as a specific fund in which the state has no property. He is chr—
with special duties in respect to that fund, and becomes officially respon:_,
for the proper discharge of those duties. Whether in virtue of his official
responsibility, and his liability under his official bond to respond for his
official defaults, the state sustains such a relation as to render it, in
supposable cases, its duty to make good any deficiency in the "bank fund," the
court gre not called on to decide or express views. 'or present purposes it
need *let only be added, that all the provisions of the statute upon the subject,
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Federal Reserve Bank of St. Louis
-9-
S
Preclude the idea of that fund being absorbed pv the state as a part of its
general assets, with only the duty on the part of the state to permit an equal
amount to be taken from the treasury to answer the purposes of the statute as to
that fund. The statute provides for an entire separation of the fund; for its
investment by the treasurer; for its recall by him or its replacement by the
sale of securities which he has received by way of investment; and, moreover,it
expressly declares that it shall be the property of the several banks that have
contributed to its creation. There is no provision for the treasurer to supply
any deficiency in that fund at any time, or for any purpose, by transferring the
moneys of the state in his hands to the account of said fund. To supply the
money to meet the charges upon the fund the only mode is by the sale of the
securities, a collection of the loans, and a resort to further contributions
by the banks, as provided in the statute. Hence it is obvious thet, in order to
warrant the treasurer to appropriate the money of the state to the purposes of
the "bank fund," special authority, by act of the legislature, would be necessary.
The order, therefore, 107 mandamus should not require him to pay to the receiver
any money of the state as distinguished from the "bank fund." In the opinion
of the court, also, such order should not require him to pay money of his own,
on the score of his having subjected himself to liability for the deficit of
that fund by reason of his having wrongfully paid it over to banks not entitled
to have it. In the first place this is riot the appropriate proceedings in
which to make the issue and try the question of his liability on this score. In
the next place the order can proPer;y atend only to require him to do what it is
his clear ministerial duty to do. That ministerial duty must be regarded as
limited to the paying over of the funds in his hands. Whether he may be liable
to respond in damages for official or personal default, can properly be determined
only by a different proceeding, and if so liable, the final remedy would be by
process to enforce pecuniary satisfaction by payment of the adjudged damages.
But,in the present case, a conclusive reason for limiting the order exists
in the fact that the present treasurer has had nothing to do with the "bank fund,
except to receive from a predecessor the sum now in his hands, and no more, and
that predecessor, (Ron. John B. Page,) passed to the present treasurer, all that
he received from H. M. Bates, a former treasurer, except what he has paid to the
receiver under the order of the chancellor. The amount of the fund, in the
accumulation and disposition of it since 18.54, and the present condition of it,
are set forth in the answer of said John B. Page, which is adopted and supplemented
by the present treasurer; by which it appears that all the requirements made to +1
'
,
various banks that had contributed to the fund, were made by Mr. Bates while he
was treasurer. John B. Page stands therefore clear of any ground or reason for
imputing to him official fault or misjudgment in this respect; and, in view of
facts set forth in his answer constituting the reason for his witholding fro"
receiver the balance of the fumd claimed by the Farmers' Bank mud the Bank o
Poultney, there seems to be no ground for imputing to him any personal short
coming in thus withholding that balance. The same remarks apply as Tell to
present treasurer.
It is therefore adjudged that a write issue in due form, commanding John A. Page,
III treasurer
of this state, to pay over, under the said order made by the chancellor,
, being the amount of the "bank fund" in his hands as treasurer,
the sun of
after deducting therefrom the sum paid, or to be paid, to their counsel by the
>1, for
for tHP reasonable cl,Prr.nF of srell nonns,
said John P. and John P.
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Federal Reserve Bank of St. Louis
•
the reasonable charges of such counsel, for ap,)earing and answering in court
the chancellor 1): W/107 the
to said petition, to be fixed and allowed
to
:ay
the bz_n_ funa to sate receiver
treasurer
over
the
original order upon
was made. "
•
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@FedFRASER