The Bismarck Tribune Newspaper, January 27, 1925, Page 8

y t (PAGE EIGHT NQTPONE Teor 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 28 24 26 26 27 28 29 BANK LEGISL THE BISMARCK TION PENDING | A BILL For an Act to Safeguard and Conserve the Assets of State Banks, regulate and Control the Pledging or Hypothecating of the As- sets of State Bank, Regulating and Controlling Rediscounts and Loans for State Banks, and Fixing the Ratio that the Assets Pledged and Hypothecated Shall Bear to the Bank’s Obligations Thereby Secured and Prescribing the Percentage of the Bank’s Assets Which May Be Pledged and Hypothecated, and Limiting Bills Payable in State Banks to Their Combined Capital and Sur- plus, Providing for Filing Such Contracts for Record in the State Examiner’s Office and Authorizing the State Banking Board in Case of Emergency to Grant Relief, and Fixing the Penalty for the Violation Thereof. Be It Enacted by the Legislative Assembly of the State of North Dakota: SECTION 1. No state bank shall either directly, or indirectly pledge or hypothecate any of its bills receivable, commercial paper, loans or discounts, or other agsets of the bank, except for the purpose of securing cash for replenishing and keeping up the legal cash reserve of the bank. SEC. 2. It shall be unlawful for any bank to pledge to hypo- thecate more than 30 per cent of its assets, other than real estate and fixtures, and real estate loans; provided, that paper secured by warehouse receipts may be re-discounted, pledged or hypothecated without regard to the ratio that the volume of such paper bears to the total assets of the bank. It shall be un- lawful for any state bank to pledge or hypothecate more than A BILL For an Act to Amend and Re-enact Sections 5159 and 5160, Compiled Laws of 1913, Providing that Securities Be Deposited, and Main- tained by the Shareholder of State Banks, with the State Treas- urer to the Amount of the Par Value of all State Bank Stock Held by Persons, Corporations and Associations Whatsoever, as a Guar- antee for the Payment of Assessments, Providing Authority to Enforce the Collection of Assessments by Proceedings against the Securities as Provided by Law for Delinquent Shareholders. Be it Enacted by the Legislative Assembly of the State of North Da- ota: SECTION 1. AMENDMENT. That Section 5160, Compiled Laws of 1918, be amended and re-enacted to read as follows: Section 5160. Shares. Value. Liability of Shareholders. The capital stock of each association shall be divided into shares of one hundred dollars each, and be deemed personal property and transferable on the books of the association in such manner as may be prescribed by the by-laws or articles of such association, but no-transfer of such stock shall be valid against a bank or any creditor thereof, so longastheregistered holderof such stock shall be liable-as principal debtor, surety or otherwise to the bank for any debt which shall be due and unpaid; nor in any case shall any dividend, interest or profit be paid on such stock so long as such liability continues, but such dividend, interest, or profit shall be retained by such bank and applied to the discharge of such liabil- ities. Every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all rights and liabil- ities of prior holders of such shares, and no change shall be made in the articles of association by which the rights, remedies or security of existing creditors of the association shall be im- paired. For the purpose of guaranteeing payment of assessments on State Bank Stock, each holder of stock in every state bank here- after organized shall, after paying in full according to law for his share of stock, deposit with the State Treasurer Bonds of the United States, North Dakota State Bonds, County Bonds, School Bonds, City Bonds, Township Bonds (all being political subdivis- ions of the State of North Dakota) Real Estate Bonds soiee Be the Farm Loan Department of the Bank of North Dakota, or Fed- eral Farm Loan Bonds, in amount at least equal to the par value Senate Bills No. 71 and No..73 NINETEENTH LEGISLATIVE ASSEMBLY OF NORTH DAKOTA Senate Bill No. 71 10 a pet pak at UR Coho ati ESwonsmeaeene WWBNIMS TM wwe _ Introduced by Senator Ingerson $1.25 of the face value of its.assets for each dollar of cash re- ceived as the loans so secured; provided, that in no case shall the bills payable of any state bank exceed its combined capital and surplus. Provided, that if loans be renewed, the existing assets pledged shall be returned to the bank and that such re- newal shall be deemed as a new and original loan, and assets of the bank shall be pledged or re-pledged in accordance with the provisions of this Act. . : SECTION 3. All transactions had with state banks whereby any of the assets of the bank are pledged and hypothecated:shall bear date as of the day when such transaction is made and be dated at the bank’s principal place of business within this state. And a true and correct copy. of any articles of agreement made by any state bank with any other bank, person or association whatsoever, whereby any ofthe assets of the bank are pledged or hypothecated in any manner shall be filed immediately in the office of the State Bank Examiner. SECTION. 4. In case an emergency ‘should arise whereby it shall be deemed necessary by the State Bank Examiner to pre- serve the solvency of the bank, and the said State Bank Exam- iner shall recommend in writing to the State Banking Board, the said Board may authorize any state bank to pledge or hypo- thecate 40 percentof its assetsas heretofore in Section 2 provided, instead of 30 per cent, and may permit in such emergency an excess of such bank’s bill payable to 10 per cent above its cap- ital and surplus; provided, that such additional pledge or hypo- thecation or any excess of bills payable above capital and surplus allowed, shall not be for a longer period than ninety days. SECTION 5., If default be.made in the payment of the debt NINETEENTH LEGISLATIVE aaa OF NORTH DAKOTA These bills are now before the Legislature and will be up for early consider- ation. Some features are valuable and some are destructive. Constituents interested in improving banking conditions are requestedto read and analyze carefully and to communicate with their Senators and Represen- Introduced by Senator Ingerson of all the shares of stock in any-State Bank held by any persons, corporations or association whatsoever, provided, further, that the holders of shares of stock in all:existing solvent State Banks shall be required to deposit such securities with.the State Treasurer in installments as follows: ten per cent of the par value thereof within six months after this Act becomes effective and thereafter an additional ten per cent at the end of each year thereafter un- til there shall be deposited with the State Treasurer such securit- ies of a par value to one hundred per cent of the par value of the shares of State Bank stock so held; provided, that before any such shares may be transferred upon the books of any State Bank, there shall be deposited such securities to the amount of the full par value of such shares. At any time the shareholder shall fail to pay any assessment lawfully levied against his shares of stock in a State Bank, the State treasurer shall sell such securities according to the terms and provisions for the sale of delinquent stock provided in Sec- tion 5159, Compiled Laws of 1913, of so much thereof as may be necessary in order to pay the said assessment. Such. securities as shall be sold to pay such assessment, must be made goog:by making deposits of additional securities with the State Treasurer, as.is in this Act provided. Should any stockholder refuse,:fail or neglect to make such deposit with the State Treasurer witht the time prescribed, the officers of said bank or the receiver there- of, as the case may be, shall proceed to sell such shares of stock under and according to the terms of Section 5159 of the Compiled Laws for 1913. toe y It shall be unlawful to transfer stock in insolvent banks until securities as above enumerated shall be deposited to cover the par value thereof. Holders of stock in insolvent. banks who were bona fide holders thereof at the time that the bank failed, and who have paid all the assessments levied against said stock, shall be treated as pres- ent holders of stock in insolvent banks and shall make like install- ments of securities. ‘ Any shareholder of State Bank Stock in any State Bank who shall fail, neglect: or refuse to deposit ‘securities with the State urer in accordance herewith, shall be declared delinquent and proceeded against according to law as provided for in Section 5159, Compiled Laws of 1913, for delinquent stockholders. It shall be the duty of the Statd Examiner to make a complete list of the stockholders in all state banks, whether solvent or in- people of the State. ‘9 personal property ; ‘provided, that stich sale shall’ be 10 office of said bank; and each item of such asset shall, 11 and sold separately to the highest bidder for ‘bash. 12 under such sale may be made by any creditor’ of the bank, or 18 stockholder in said bank. Any such party who tat make +14 redemption, shall give notice in writing to the purchaser thereof, 15 on the day and at the time of said sale, and shall Have ten days 16 dfter said sale in which to complete such redemption, Senate Bill No. 73 oe 90 90.00 00.00.03 99 99 5309 Jag] SOIR AH. Co pe MOM MOSM IS me 10 in a newspaper published and jin general circulation fn, 11 or county where the association is located to any 2 4 § upon the State Bank Examiner at his: office in the te of Bis- q 8 CONYAMB MOM cTAmwloe so-secured, the pledgee or holder thereof shall give ten days’ notice in writing of his intention to foreclose upon the security so pledged, by serving a copy of said notice upon the bank and ‘bmarck, County of Burleigh, State of North Dakota, The pro- ceedings thereafter had or held, shall-be under and by virtue of the law in this state for the foreclosure and sale of wait the Id at the edemption “SEC. 6. Any pledge or hypothecation. of any of the assets of any state bank, or the sale of any of the said assets made in. violation of this Act shall be null and void, and shall be of no force and ie shall not be binding upon any of the parties affected ereby. jf SEC. 7. Any officer, agent or employee of any corporation, whatsoever, that shall violate any of the provisions of this Act, or any other person that shall conspire with any person with the intent and purpose of fraudently obtaining loans or any of the assets of any bank, shall be guilty of a felony and upon conviction thereof shall be punished by imprisonment in the State Peniten- tiary for a term not less than one year, nor more than five years, - or a fine not less than $100.00, nor more than $1000.00 or by both such fine and imprisonment. Referred to Committee on Banks and Banking. solvent, showing the amount and number of shares held by each and the name and address of the bank in which such shares are held, the amount of any unpaid assessments that have been made on any of such stock, and the name and address of each of such stockholders that he knows or can ascertain, and shall deliver such ligt to the State Treasurer within three months after the taking effect of this Act. Within seven months after the taking effect of this Act, the State Treasurer shall notify each State Bank of any, delinquency of any shareholder in stich bank who has failed to comply with the provisions of this Act, and it shall be the duty of the directors and officers of such bank to sell or cancél sich shareholder’s stock according to the provisions of Section 6159, Compiled Laws of North Dakota for the year 1913, as aménded. SECTION 2. (Amendment.) That Section 5159 of the Com- piled Lawa of North Dakota for the year 1913 be-amended end re-enacted to read as follows: Pen _ Section 5159. Delinquent Stock. How Sold., Whenever any shareholder or his assignee fails to pay any iri ent on the stock when the same is required to be paid, the ditettors of auch association shall sell the stock of the einen holder, or @s much thereof as is necessary to satisfy the ‘deb ., Mf public aution after having given three weeks’ previoys : thereof who will 12 pay the highest price therefor to be not less’ than the amount 18 due theres m, with the expenses of the advertisement and sale, 14 and the excess, if any, shall be paid to the delinquent share- BRSRES 15. helder, If no bidder can be found who, will pay for such stock 16 amount due thereon to the association, and the costs of ad- 17 ment and sale, the amount previously paid shall be for- 18 fei to the association, and such stock shail be sold as the di- 19 rectors may order within three months from the time of such 20 forfeiture, and if not so sold it shall be cancelled and deducted 21 from the capital stock of the association; provided, thet when- 5 Of Shy och easgation thot, ang’ sUgkREAer at ooh noes . such as: ion that any stockholder .of such association Rag failed or neglected to comply with the provisions of Section 5160, Compiled Laws of 1918, relating to deposits of securities in his office, it shall be the duty of such‘offieers or directors to sell or cancel such delinquent shareholder's stock within one year from the date of such notice. ; 3 Referred to Committee on Banks and Banking. we tatives at Bismarck, suggesting wherein these proposed laws may be amended so as to accomplish the. 2 teed sought and at the same time not be destruc- tive to the banking institutions, which really belong to their depositors, the _ North Dakota Bankers Association © W. C, MACFADDEN, SECRETARY—FARGO, N. D. * TUESDAY, JANUARY 27, 1925 \ t > '