Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1916-10-21

| How etermined-Every pank shall heep
on hand at all times at least twenty per
cent OF it's total deposits, OF which saIu
portion as the board OF directors may
determine, may be on deposit IN paiAs
| approved by the pubic eAainihnJir ahni az an
serve banks, which banks shal az an
times keep on hand at least twenty-five
per cent Of their total deposits IN laNtui
| money or on deposit In banks DubJecl 70
| the approval Of the SAID puDiic examiner
az reserve banks.
Cash items shall not be considered as
part OF the reserve OF any oank anu
! any overdrafts on correspondents Whlch
may exist, shall be deducted from the 70,
tai amount OF cash and due fron banks
/ before the reserve percentage shal De
computed The percentage OF reserve
shall be computed N tne iono"tbs 0i. tbs
deductions hcreinbeforc requiFeo II necess
sary, the total net amount OF eaSh ana
due from banks shan be divlded Dy tle
! total deposits" as hereinbefore defined.
and the result shall be the percentage OF
| reserve on hand.
Sec 30 Reserves Must be Kept U,
/ Whenever the reserve Of any bank shah
I fan below the amount herein required 70
! be Kent. such bank shall not increase its
| loans or discounts otherwise than by dis-
! counting or purchasing bills or eNcnange
| payable at sight or on demand ana the
/ public examiner shall notify any bank
/ whose reserve may be below the amount
required herein, 70 make good such re-
serve. and in case the bank falis ior tAF-
U
serve the public examiner is hereby au-
| thorized 10 take charge OF and TO wind
up the affairs Of such bank
Sec 33 I,oaus-Amount Limited-No
| Individual firm or corporation transact
1 ing a banking business IN tnls state, snaii
! loan TO any single corporation, nrm or m
| dividual including in such loans an ioans l
| made TO the several members OF such cor
/ pOratiOn, firm or co-partnership, more
/ than twenty-five per cent OF the pald up
/ capital and surplus OF such bank ana
] Ill . fnfe al N
1 several stockholders Of any bank lnclud-
1 ing any and al liabilities OF any ilrm or
! corporation IN which such StorkAoiders
may be interested, 70 such hank exceed
/ fftv per cent Of the paid up capital OF
/ said bank But the discount OF Bills OF
/ exchange drawn in good laltn against
actually existing values and the alscoull
/ Of commercial paper acluaitE oWie9 "a
I the person negotiating the same shan "2t
i 81 considered as money borrowed by s4ch
I car "a Same -Penalty-Any officer. di-
rector or emplove Of any bank transacung
/ n b4nbing business in this state. Wlo shau
/ knowingly permit or allow sh2r'hoidtfs
/ OF such bank 20 at any one time become
/ indebted to such bank in total sum exc
/ ceedng fifty per cent az thc pJla up capi-
/ tai of such bank, as covered by section 50,
upon conviction thereof shall be suplect
! 10 a fine of not to exceed I'VE hundfeq
/ dollars, or by imprisonment not TO exceed
three years in the state penitenuary' OF
Sec S. Loans TO Members-Ofncers-
/ Employees-No Partnership, firm or IN
! divdual transactlng banNng business
! in this state, shall be permitted 10 carry
! any note or obligation of any such part
| neTship or firm or individual OF any OF
| the members Of such partnership or nrm
| as any part of the assets Of the bank. And
no officer or employe of amy corporation
/ transacting a banking business IN THIS
! state shall be permitted TO borrow any OF
the funds of the bank upon his own note
,.n.f 4vrrftn hQ
| the approval of a majority OF the board OF
directors of the bank TO each SPECIFIC loan,
and the approval, II obtained, shall be
/ properly recorded in the banks minute
! book. No such loans shall be made with
| out ample collatera or a responsible en-
dorser, and each and every loan so made
| shall be Immediately reported in detail
| to the public examiner
Any individual member Of firm, part
/ nership, officer, director or employe who
| shall violate the provisions % tho section
shall be deemed guilty of embezzlement OF
| the funds Of said bank to the extent OF
| said note or obligation so given, and on
! conviction thereof shall be punished by
| n fine not exceeding one thousand dollars
or Imprisonment in the penitentiary not
| to exceed five years, or both in the dis
| erection of the court.
! Sec So. Investment of Funds-Certain
! Loans Prohibited-No bank shall employ
/ it's moneys directly or indirectly, in trade
! or commerce by buying or selling goods,
| chattels wares and merchandise, and
| shall not invest any OF It's funds in the
stock of any other bank or corporation,
nor make any loans or discounts on the
security Of the shares OF its own capital
| stock, nor be the purchaser nor holder
| Of any such shares unless such security
or purchase shall be necessary to prevent
| loss upon debt previously contracted III
! good faith; and stock so purchased or
| acquired shall, within six months OF the
! time OF it's purchase, be sold or disposed
! of at public or private sale; after the
! expiration of six months any such stock
/ shall he con SidefgG a part OF the
| assets of such bank.
| Nothing herein enacted shall be con-
| strued to prevent any bank existing un-
der the provisions of this act from quail
| flying to enter the Federal Reserve Sys-
| tenn and purchasing shares of stock of the
Regional Banks. in accordance with the
federal statutes, except that such banks
shall be in all other respects subject to
the provisions OF this act
/ No bank shall be prohibited from hold
| ing and selling all kinds of property which
! may come into its possession as collateral
! security for loans or any ordinary col
| lection Of debts. in the manner prescribed
| by law; provided further that any goods
| or chattels coming into the possession of
| any bank as aforesaid shall be disposed
| OF as soon as possible and shall not be
! considered as a part of such banks assets
| after the expiration OF six months from
/ the date of acquiring the same.
Sec 81. Assets not TO be Pledged
Bills Payable-Cannot Borrow on Certfi-
Gates OF Deposit-No bank. banker or
| hank official shall give preference to any
depositor or creditor by pledging the as
! sets of the bank collateral security;
| provided that any bank may borrow for
! temporary purposes, and may pledge as
/ sets of the bank not exceeding fifty per
| cent in excess of the amount borrowed, as
| collateral security therefor; provided. that
whensver bank issues its bills payable
| for borrowed money, II shall within five
days after the execution thereof forward
| - the public examiner for the files OF his
| office duly verified copy of such bills
payable and of such collateral pledge of
security may have been issued there
! with. and IL such bills payable is con-
/ timed by renewal either In a greater or
lesser amount, a like copy of such re-
newal obligation and collateral pledge OF
security shall be forwarded to the public
! examiner forthwith: Provided further,
! that whenever IL shall appear that bank
! is borrowing halDtually for the purpose of
1 reloaning. the public examiner may re-
| quire such bank TO pay on such borrowed
| money.
! Nothing herein contained shall prevent
any bank from rediscounting in good
faith and endorsing any Of its negotiable
1 it's Capital stock.
/ It shall be unlawful for any bank to
Issue its certificates of deposit for the pur-
! pose of borrowing money. In all eases
! where money is borrowed n bank shall
| Issue it's bills payable" and shall show
! the true amount of borrowed money on its
! hooks and in all reports and statements
required or contemplated within the pro-
visions of this act, under bills payable"
No bank shall make partial payments
upon certificates of deposit.
Any officer OF a bank in this state vio-
lating the provisions of this section. shall
be deemed 10 be guilty of "A misdemeanor
and upon conviction shall he subject to a
fine OF not less than one hundred dollars
nor more than three hundred dollars in
the discretion of the court.
Sec. 3S Checks-Certified When--It
shall be unlawful for any officer. clerk, or
agent OF any bank doing business under
this act TO certify any check. draft or or
der drawn upon the bank unless the per-
son, firm corporation drawing such
check. draft or order. has on deposit
with the bank at the time such draft,
check or order is certified an amount OF
money equal to the amount specified In
spch check Any check. draft, or order
80 certified by the duly authorized Of
ficer shall be good and valid obligation
against such bank.
Sec 80. Bad Debts--An debts due to
amy bank on which the interest is past