The Massachusetts spy, and Worcester County advertiser. [volume] ([Worcester, Mass.]) 1825-1831, 1829-03-18
LAW OF MASSACHUSETTS,.
AN ACT to regulate Banks and BANKING

Of Representatives IN General Court assembled,
and by the authority Of the same, That from
and after the passing of this act, every Bank,
which shall receive Charter, from or by the
| authority of this Commonwealth, and every
Bank whose capital shall be increased, or whose
Charter shall be extended, shall be governed
j oy the following rules, and subjected to all the
duties, limitations, restrictions, liabilities, aid
provisions, contained in this act.
SEC 9. Be 1t further enacted, That every
Bank, incorporated by the authority aforesaid
shall be CORPORATE ton by the name Of the Pres
ldent, Directors, and Company of the
Bank, (the blank TO be filled as the case NAV
! reqnIre) capable in law to sue and be sued to
final Judgment and execution, to have and use a
common seal, and the same at pleasure again
to break, alter, and renew and also, to estab-
lish and put in force such bylaws and regula-
tons as to them shall appear necessary and con
venient for the government of said Corporation,
and at any legal meeting Of the Stockholders
dolly called therefor, by majority of votes the
same to alter, amend, or annul, and to substi-
tute others in their place as shall seem to them
right and expedient, which, being entered on
their books, shall be valid and binding-provid-
ed, that such bylaws and regulations shall in
no wise be contrary to the Constitution and
laws of this Commonwealth. And said Bank
ing Corporations are hereby made capable in
law to have, hold, purchase, receive, possess,
and retain to them, their successors, and as
signs, lands, rents, tenements, and heredita-
ments, TO an amount authorized by law with
power to bargain, sell, and dispose of the same.
and to loan and negotiate their monies and
effects by discounting on banking principles or
such security as they shall think advisable
SEC. 3. Be 1t further enacted, That no Bank,
except such as are now incorporated, shall 90
into operation, make discounts, loan money,
emit bills or promissory notes, until fifty per
centum, at least. of It's Capital Stock shall have
been paid in gold and silver money, and exist
ing in its vaults, which shall have been exam
ned by three Commissioners, appointed by the
Governor, whose duty it shall be, at the ex-
pense OF the Banks, to examine and count the
money actually in the vaults, and to ascertain
by the oaths of majority of the Directors of
said Bank, that its Capital hath been paid in by
the Stockholders of said Banks, toward pay
ment for their respective shares and not for
any other purpose, and that it is intended to
have it therein remain as part of said Capital,
and to return Certificate thereof to the Gov
ernor, and no loan shall be made to any stock
holder until the full amount of his shares shall
have been paid into the Bank and it shall not
be lawful for any Bank to have owing to it, on
loan on pledge of its own stock, greater
amount than fifty per centum Of it's Capital
Stock actually paid in !; and no part of the Cap
ltal Stock of any Bank shall be sold or trans
ierred, until the whole amount thereof shall
have been paid in.
SEf--4. Be 1T further enacted, That the
amount OF Bills issued by any Bank, shall not,
at any one time, exceed twenty five per centum
beyond the amount Of the Capital Stock actu-
ally paid in, and no loan or discount shall be
made, nor shall any bill or note be issued by
said Corporation, or by any person on their ac-
count, IN any other place than at the said Bank.
SEC. 8. Be 1t further enacted That the to-
tai amount of debts which any Banking Cor
poratlon snail at any time owe, whether by
BOND, Dill, note, or other contract shall not ex-
coed twice the amount of its Capital Stock ac-
tually paid in, exclusive of sums due ON ac-
count OF deposits; nor shall there be due to
SAID Corporation at any one time more than
double the amount of its Capital Stock actually
paid IN. In case of excess of debts so due from
said Bank, the Directors, under whose admin
lstraton 1t shall happen, shall be liable for the
same In their private capacities; and an action
OF debt may, in such case, be brought against
them or any of them, their, or any of their
heirs, executors, or administrators, in any Court
proper TO try the same, by any creditor OF cred
ltors OF said Corporation, and may BIO prosecul-
ed to final judgment and execution, any condi-
ton, covenant, or agreement to the contrary
strued to exempt said Corporation, or the lands
tenements, goods, or chattes of the same, from
being also liable for and chargeable with said
excess. Such of said Directors who may have
been absent when said excess was contracted or
created, or who may have disscnted from the
resolution or act whereby the same was con.
tracted or created, may respectively exonerate
themselves from being so liable, by forthwith
giving notice the fact, and of their absence or
dissent to the Governor and Council, and To
the Stockholders at any general meeting which
they shall have power to call for hat purpose
SEC. 6. Be 1t further enacted, That no
Banking Corporation within and under the au-
thority of this Commonwealth, shall vest, use,
or improve any of its monies, goods, ehattels,
or effects, in trade or commerce but any Cor
poration aforesaid may sell all kinds of personal
pledges, lodged with it by way of security, to
an aIpount sufficient to reimburse the sum loan
ed with interest and expenses. Every Banking
Cooperation as aforesaid may hold real estate
lands, and tenements, requisite for the conven-
lent transaction of its business, not exceeding
twelve per centum on the amount Of its Capital
Stock, unless they have been or shall be there
to specially authorized, exclusive of what it
may hold on mortgage, receive on execution,
or take as security tor, or in the payment OF
any debt to said Corporation, and no more.
SEC. z. BE It further enacted, That none
but member OF the Corporation for which he
is chosen as Director, being citizen OF, anu
resident in, the Commonwealth, shall be eligi
BILE to that office and majority OF Directors
in any Bank shall be residents within the
County where the Bank is located and no per-
son shall be Director in two Banks at one
and the Same time mo Bank shall have less
than five, nor more than twelve Directors, 10
be determined by their bylaws. The Direc-
tors shall choose one of their own number to
act as President, and in case of the absence of
the President, a Chairman may he appointed
for the lime being. majority of the Direc-
tors shall always he necessary to constitute a
quorum for doing business the Directors may
make the President such compensation as shall
appear to them reasonable.
SEC. 8. BE Il further enacted: That the Di-
rectors shall be chosen by ballot annually, at
meeting to be holden on tho first Monday in