(SENATE BILL No. 477. APPROVED JUNE 23, 1919.)

AN ACT to revise the law with relation to banks and banking. SECTION 1. Be it enacted by the People of the State of Illinois. represented in the General Assembly: That on a ratification of this Act by a vote of the people in accordance with the Constitution of this State, it shall be lawful to form banks and banking associations, as hereinafter provided, for the purpose of discount and deposit, buying and selling exchange and doing a general banking business, excepting the issuing of bills to circulate as money; and such banks or banking associations shall have the power to loan money on personal and real estate security, and to accept and execute trusts.

§ 2. When any association of persons, not less than three, desire to avail themselves of the provisions of this Act, they shall apply to the Auditor for permission to organize stating their place of business, the amount of capital and name under which they desire to organize, and the time for which such association shall continue, which statement shall be under their hands and seals, and acknowledged before some officer authorized by law to acknowledge deeds and the Auditor shall issue to them a permit to organize, but no permit shall be issued hereunder to any corporation by the same name as any other corporation then operating under the laws of this State or of any law of the United States or of any person, firm or partnership then conducting a banking business. or by a name so similar to the name of any other corporation then operating under the laws of this State, or of any law of the United States or of any person, firm, partnership or corporation then conducting a banking business as in the opinion of the Auditor of Public Accounts will create confusion, provided that a permit may be issued hereunder to a corporation by a name the same as or similar to the name of any person. firm or parntership, then conducting a banking business, by and with

the written consent of such person, firm or partnership of the same or similar name, such name of such proposed corporation not being the same or similar to the name of any banking corporation then operating under the laws of this State or of the United States, and all associations formed under this Act shall have their capital stock divided into shares of one hundred dollars ($100) each.

§3. As soon as may be after receipt of authorization, books of subscription to the capital stock may be opened, and when the capital stock shall have been fully subscribed for a meeting of the subscribers to the stock of such association shall be called (each subscriber having had at least three days' notice) for determination of the number and election of directors to serve as managers for one year, and until their successors are elected. And no director shall be elected unless he shall have received votes representing at least a majority of the shares of the association; and the voting may be done by person, or by proxy, and at such election the subscribers or stockholders shall have the right to vote for the number of shares owned or subscribed by him for as many persons as there are directors to be elected, or to accumulate such shares and give one candidate as many votes as the number of directors multiplied by the number of his shares of stock shall equal, or to distribute them on the same principle among as many candidates as he shall deem proper.

§ 4. The directors so elected may proceed to organize by the election of one of their number as president, and may appoint the necessary officers and employees and fix their salaries to carry on the business of the bank or association and make by-laws (not inconsistent with this Act) for the government of the bank or association; and each director shall take and subscribe to an oath such as the Auditor shall prescribe of fealty to the bank or association of which he is director and that he will, so far as the duty involves on him, diligently and honestly administer the affairs of such bank or association and will not knowingly violate or willingly permit to be violated any of the provisions of this Act; and that he is the owner in good faith and in his own right of the number of shares of stock required by this Act; and that the same is not hypothecated or in any way pledged as security for any loan or debt. Such oath subscribed by the director making it and certified by a proper officer authorized to administer oaths shall be immediately transmitted to the Auditor and shall be filed and preserved by him in his office. The directors shall cause to be kept suitable books of record of all the transactions of the bank or association and shall furnish to the Auditor lists of the stockholders and copies of any other records the Auditor may require. And there shall be an annual meeting of the stockholders for the election of directors each year on the first Monday in January unless some other date shall be fixed by the by-laws of the association. Any omission to elect directors shall not impair any of the rights and privileges of the association or of any person in any way interested, but the existing directors shall hold office until their successors are elected and

qualified as in such cases may be by law provided. Vacancies may be filled by a two-thirds vote of the remaining directors.

Every director of any bank or association organized under the provisions of this Act must own in his own right, free of any lien or incumberance at least ten shares of the capital stock of such bank or association of which he is a director, and stock certificates for not less than ten shares shall be filed unendorsed and unassigned with the cashier of the bank during his term as director. Any director who ceases to be the owner of ten shares of the capital stock of such bank or association, or who becomes in any form disqualified shall therefor vacate his place as such director. The directors of any bank or association organized under the provisions of this Act shall hold regular meetings at least once each month and there shall be present a quorum as may be prescribed by the by-laws of such bank or association approved by the Auditor of Public Accounts.

Any officer, director or employee of any bank or association organized under the provisions of this Act, who shall wilfully and knowingly subscribe to or make or cause to be made any false statement with intent to deceive any person or persons authorized to examine into the affairs of such bank or association, upon conviction thereof, shall be punished by imprisonment of not less than one year or more than ten years.

§ 5. When the directors have organized, as in section 4 of this Act, and the capital stock of such association shall have been all fully paid in and record of the same laid before the Auditor, he shall by himself or some competent person of his appointment, make a thorough examination into the affairs of such association, and if satisfied the authorized capital has been paid in, and that the association has the full amount dedicated to the business, including proposed surplus, if any. and when they pay into the Auditor's office the reasonable expenses of such examination, he shall give them a written or printed certificate. under seal authorizing them to commence the business designated in section 1 of this Act. And said certificate and the permit issued in accordance herewith, duly certified by said Auditor, shall be filed and recorded in the office for the recording of deeds in the county where such bank is organized and the original or a certified copy thereof shall be evidence in all courts of the existence and authority of said corporation to do business. Upon the recording of said certificate and permit said bank shall be deemed fully organized and may proceed to business.

The Auditor may, in his discretion, withhold the issuing of the said certificate, authorizing the commencement of business when he is not satisfied as to the personal character and standing of the officers or directors elected or appointed, in accordance with sections three and four of this Act; or when he has reason to believe that the bank is organized for any purpose other than that contemplated by this Act.

§ 6. Every stockholder in any bank or banking association organized under the provisions of this Act shall be individually responsible and liable to its creditors, over and above the amount of stock by him or her held, to an amount equal to his or her respective shares so held, for

all its liabilities accruing while he or she remains such stockholder. It is hereby made the duty of the president and cashier, within thirty days after organization, to file in the office of the recorder of deeds of the county in which such bank is located, a certified list of all the original stockholders, giving the number of shares of stock held by each, and thereafter a certificate of all transfer of stock, not later than ten days after such transfer. No transfer of stock shall operate as a release of liability provided in this section.

§ 7. Any and all persons and associations organizing under the provisions of this Act shall make to the Auditor a report according to the form which may be prescribed by him, verified by oath or affirmation of the president or cashier of such association, which report shall exhibit in detail and under appropriate heads the resources and liabilities of such bank or association at the close of business of any day he may choose; and he shall call for such reports at least once every three months of each year, and the officers of said bank shall transmit the same to the Auditor within five days after receiving call for the same; and any bank failing to make and transmit such report, or to comply with any provisions of this Act, shall be subject to a penalty of one hundred dollars for each day after five days that such report is delayed beyond that time. And he shall cause such report to be published at the expense of such bank in some newspaper published in the city or town where such bank is located; or if no newspaper is published in such town, then in the nearest newspaper to such town. Every such quarterly report shall be accompanied with a fee of five dollars to defray the expense of examining the same and preparing it for publication.

§ 8. The Auditor, as often as he shall deem necessary or proper, and at least once in each year, shall appoint a suitable person or persons to make an examination of the affairs of every bank established under the provisions of this Act, which person shall not be a stockholder or officer or employee of any bank which he may be directed to examine, and who shall have power to make a thorough examination into all the affairs of the bank, and in so doing to examine any of the officers or agents or employees thereof on oath, and shall make a full and detailed report of the condition of the bank to the Auditor; and the bank shall not be subject to any other visitorial power than such as may be authorized by this Act, except such as are vested in the several courts of law and chancery. And there shall be paid to the Auditor of Public Accounts for each such examination, a fee of twenty-five dollars ($25.00) and two cents (2c) additional for each one thousand dollars ($1,000) of the total assets of the bank examined.

$9. Associations organized under this Act shall be bodies corporate and politic for the period for which they may be organized, may sue and be sued, may have a common seal which they may alter or renew at pleasure, may own, possess and may carry as assets the real estate necessary in which to do its banking business, and such other real estate to which it may obtain title in the collection of its debts, but shall not carry in its assets any real estate except its banking house for the period of more than five years after acquiring title to the same.

§ 10. The total liabilities to any association, of any person or o any corporation or firm for money borrowed, including in the liabilitie of a company or firm the liabilities of the several members thereof, shal at no time exceed fifteen per cent of the amount of the capital stock o such association actually paid in and unimpaired, and fifteen per cen of its unimpaired surplus fund: Provided, however, that the total lia bilities of any such person, company or firm shall at no time exceed thirt per cent of the amount of capital actually paid in: And, provided, fur ther, that undivided profits shall not be construed as a part of the sur plus. But (1) the discount of bills of exchange drawn in good fait against actually existing values; (2) the discount of commercial of business paper actually owned by the person negotiating the same; (3 the purchase of or loaning money in exchange for, evidences of indebt edness which shall be secured by mortgage or trust deed upon productiv real estate, the value of which, exclusive of buildings, as ascertained by the oath of two disinterested appraisers, is double the amount of the principal debt secured, and which mortgage or trust deed is ascertaine by a guaranty policy of a title guaranty company approved by the Audi tor of Public Accounts, or by a registrar's certificate of title in any county having adopted the provisions of the Land Titles Act, or by the opinion of a reputable attorney at law to be a first lien upon the rea estate therein described; and (4) the purchase of, or loaning money in exchange for, evidences of indebtedness secured by a written pledg covering live stock, the president, vice president or cashier of such bank or association certifying at the time of such purchase or loan that the value of such live stock is double the principal debt secured, shall not be considered as money borrowed within the meaning of this section.

In computing the total liabilities of any person, corporation or firm for the purpose of this section, there shall not be included any liabilities of such person, corporation or firm which shall be secured by collateral approved as sufficient security therefor by the Auditor of Public Accounts, and deposited with him, or which shall be secured by a good and sufficient bond conditioned to indemnify and save harmless such bank from loss or damage on account of failure to pay such loan on maturity, filed with and approved by the Auditor of Public Ac

counts.

And, provided, further, that if any bank or association existing hereunder shall cause to be deposited with the Auditor of Public Accounts a good and sufficient bond, or shall cause to be deposited with him securities approved by him (such securities not being assets of said Lank or association), the Auditor of Public Accounts may issue to such bank or association a permit, granting permission to such bank or association, within the period of one year from the date of said permit, to carry, without liability against the officers and directors of such bank or association, on account of such loans being excessive. loans otherwise excessive under the provisions hereof, to an aggregate amount equal to the amount of such bond, or to the value of such securities as determined by the Auditor of Public Accounts. Such bond