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 of the net profits of the association as they shall judge expedient, but each association shall, before the declaration of a dividend, carry one-tenth part of its net profits of the preceding half year to its surplus fund until the same shall amount to 20 per cent. of its capital stock.

§ 14. QUALIFICATION OF DIRECTOR.] Every director must own in his own right at least ten shares of the capital stock of the association of which he is a director; any director who ceases to be the owner of ten shares of the stock, or who becomes in any other manner disqualified, shall thereby vacate his place.

§ 15. CAPITAL TO REMAIN INVIOLATE-BAD DEBTS.] No association or any member thereof shall, during the time it shall continue its banking operations, withdraw or permit to be withdrawn, either in form of dividends or otherwise, any portion of its capital; if losses have at any time been sustained by such association equal or exceeding its undivided profits then on hand, no dividend shall be made; and no dividend shall be made by any association while it continues its banking business to an amount greater than its net profits on hand, deducting therefrom its losses and bad debts; all debts due to an association, on which the interest is past due and unpaid for a period of six months, unless the same are well secured and in process of collection, shall be considered bad debts within the meaning of this section; but nothing in this section shall prevent the reduction of capital of the association under Section 11.

§ 16. INTEREST.] Such association may demand and receive for loans on personal security, or for notes, bills, or other evidences of debt, discounted, such rate of interest as may be agreed upon, not exceeding the amount authorized by law to be contracted for, and it shall be lawful to receive the interest according to the ordinary usage of banking institutions.

§ 17. REPORTS, PENALTY FOR FAILURE TO MAKE.] Every association shall make at least four reports each year to the Public Examiner, according to the form which may be prescribed by him, verified by the oath of the president or cashier and attested by at least two of the directors; such report shall exhibit in detail and under appropriate heads the resources and liabilities of the association at the close of business on any past day by him specified, and shall be transmitted to the Public Examiner within seven days after the receipt of such request from him, and in the same form shall be published in a newspaper published in the city or county where such association is located, at the expense of the association. The Public Examiner shall also have power to call for special reports from any association whenever in his judgment the same are necessary, in order to [obtain] a full and complete knowledge of its condition; every association which fails to make and transmit any report required under this section shall be subject to a penalty of two hundred (200) dollars for each offense.

§ 18. RESPONSIBILITY OF SHAREHOLDERS.] The shareholders