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''■9/( The Banking Laws
jj of Illinois


Compiled by W. H. Kniffin, Jr.

Compliments of the

Drovers Deposit National Bank

Chicago 11


B 3 lED 111


^^^my^n^ ®aJp^<ld3 av\A:.t^

^-*^Q-o^-^r> ,


United States Depositary



Quick Service

and careful attention

given to all

business entrusted to us


of Banks and Bankers
Merchants, Corporations
and Individuals invited


as Reserve Agent for
National Banks

The Banking Laws
of Illinois

Compiled by


> .1

J » >, > • »


> ,

Copyright, 1911, Bankers Publishing Co.. N, Y.


Statement of Condition

June 7, 1911

Loans and Discounts
Overdrafts - - - ■»
United States and ether Ei>nd&

Cash and due from Banks

. , , , . ^

Capital Stock paid in - -
Surplus and Profits
Nat'l Bank Notes Outstanding
Reserved for Taxes
Deposits - - - - -












Banking Laws of Illinois


/M3/TiANii-yA On the ratification of this Act


TiON AND by a vote or the people in ac-

MANAGEMENT "^ i ..v .1 r- *.'4. 4.' ^

cordance with the Constitution
of this State^ (the Act was ratified as herewith
given), 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
GENERAL i v i- v •

POWERS a general banking business, ex-

cepting 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 ac-
cept and execute trusts. (Section 1.)


When any association of persons
APPLICATION desire to avail themselves of the
AUDITOR, provisions of this Act they may

organTze^ ^Pply to the Auditor for per-
mission 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 them a permit to
organize. But no permit shall be issued to
more than one association of the same name;
and all persons or associations formed under
this Act shall have their capital stock divided
into shares of one hundred dollars each.
(Section 2.)

SUBSCRIP- ^^ ^°°" ^^ ™^y ^ after receipt

TiON TO of authorization, books of sub-


ELECTION OF scription to the capital stock

VOT^NG^'^^' ™^y ^^ opened, and when the

capital stock shall have been

fully subscribed for, a meeting of the sub-

scribers to the capital stock of such associa-
tion shall be called (each subscriber having had
at least three daj^s' notice) for determination
of the number and election of directors to serve
as managers for one year and until their suc-
cessors are elected. And no director shall be
elected unless he shall have received votes rep-
resenting 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
each subscriber or stockholder 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 cumulate
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. (Section 3.)

The directors so elected may

ELECTION i . • I, i.1, 1

OF OFFICERS proceed to organize by the elec-
tion of one of their number as
president and may appoint the necessary offi-

cers and employees and fix their salaries to
carry on the business of the bank or associa-
tion and make by-laws (not inconsistent with
this Act) for the government of the bank or
association; and each director shall take and
Q\/ I AXA/e subscribe to an oath such as the

Bt-UAWS 4 1. 11-1 .1 r-

OATH OF Auditor shall prescribe, oi

fealty to the bank or association
of which he is director, and that he will, so far
as the duty devolves on him, diligently and hon-
estly administer the affairs of such bank or
association, and will not knowingly violate or
willingly permit to be violated any of the pro-
visions of this Act; and that he is the owner
in good faith, and in his own right of the num-
ber of shares of stock required by this Act;
and that 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 trans-
mitted 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 associa-
tion^ 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 associa-
tion 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 by-laws provided. Vacan-
cies may be filled by a two-thirds vote of the
remaining directors.

Every director of any bank or
TiONS FOR association organized under the
jj'^^i'jj*^'!^' provisions of this Act must own

in his own right, free of any
lien or incumbrance, at least ten shares of the
capital stock of such bank or association of
which he is a director. Any director who ceases

to be the owner of ten shares of the capital
stock of such bank or association, or who be-
comes in any form disqualified, shall therefor
vacate his place as such director. The direc-
tors 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, ap-
proved by the Auditor of Public Accounts.

Any officer, director or em-
STATEMENTS ployce of any bank or associa-
tion organized under the pro-
visions of this Act and who shall wilfully and
knowingly subscribe to or make, or cause to be
made, any false statement with intent to de-
ceive any person or persons authorized to ex-
amine into the ajflfairs of such bank or associa-
tion, upon conviction thereof, shall be punished
by imprisonment of not less than one year or
more than ten years. (Section 4.)

When the directors have orsan-

EXAMINATION . j u- r r i-i,-

BY AUDITOR izcd, as m section tour or this

OPEN^iNt? ^^^' ^^^ ^^^ capital stock of

such association shall have been
all fully paid in and record of the same laid be-


fore 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 cap-
ital 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
-gP^jPH^^^g them a written or printed cer-
OF AUTHOR- tificate, under seal, authorizing
them to commence the business
designated in section one of this Act. And said
certificate and the permit issued in accordance
therewith, duly certified by said Auditor, shall
be filed and recorded in the office for the re-
cording 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 or 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 stand-
ing of the officers or directors elected or ap-
pointed in accordance with sections three and
four of this Act; or when he has reason to be-
lieve that the bank is organized for any pur-
pose other than that contemplated by this Act.
(Section 5.)

Every stockholder in anv bank
ERS' or banking association organized

LIST "of ^' under the provisions of this Act
STOCKHOLD- shall be individually responsible
FILED 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 lia-
bilities 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 said
bank is located, a certified list of all the orig-
inal stockholders, giving the number of shares


of stock held by each, and thereafter a certifi-
cate of all transfers of stock, not later than
ten daj^s after such transfer. No transfer of
stock shall operate as a release of liability pro-
vided in this section. (Section 6.)

REPORTS ^^y^ ^^^ ^^^ persons and asso-

AND ciations organizing under the

SUPERVISION ^ o ..y A . It,

provisions oi 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 cash-
ier of such association, which report shall
PgpQP^g ^Q exhibit in detail and under ap-
AUDITOR propriate heads the resources

THREE and liabilities of such bank or

«cif^ Ji*^tO association before the commence-

PENALTY /» 1 .

ment or business on the morn-
ing 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
banks shall transmit the same to the Auditor
within five days after receiving call for the
same; and any bank failing to make and trans-
mit such report, or to comply with any pro-


visions 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 pub-
lished in such town, then in the nearest news-
paper to such town. Every such quarterly re-
port shall be accompanied with a fee of five
dollars to defray the expense of examining the
same and preparing it for publication. (Sec-
tion 7.)

YEARLY "^^^ Auditor as often as he shall

EXAM IN A- 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 estab-
lished under the provisions of this Act, which
person shall not be a stockholder or officer or
employee of any bank which he may be di-
rected to examine, and who shall have power to
make a thorough examination into all the af-
fairs 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 de-
tailed 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 chan-

COMPENSA- ^^^y- ^^ ^^^^y person ap-
TiON OF pointed to make such examina-

EXAMINERS f. in - r -,.

tion shall receive for his ser-
vices at the rate of ten dollars for each day by
him employed in such examination, and two
dollars for each twenty-five miles he shall nec-
essarily travel in the performance of his duty,
which shall be paid to them by the bank
examined. (Section 8.)

Associations organized under this
ESTATE, Act shall be bodies corporate

LIMITATIONS *^^ 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 a banking busi-


nesSj and such other real estate to which they
may obtain title in the collection of debts, but
shall not carry in the assets any real estate
except the banking house for a period of more
than five years after acquiring title to same.
(Section 9-)

The total liabilities to any asso-
LIMITATIONS sociation of any person or of
RESTRICTIONS ^^^ corporation or firm for

money borrowed including in the
liabilities of a company or firm the liabilities
of the several members thereof, shall at no

time exceed fifteen per cent, of
OF LOANS the amount of the capital stock

of such association actually paid
in and unimpaired and fifteen per cent, of its
unimpaired surplus fund.

Provided, however, that the total liabilities of
any such person, company or firm shall at no
time exceed thirty per cent, of the amount of
capital actually paid in: And, provided, fur-
ther, that undivided profits shall not be con-
strued as a part of the surplus ; but the discount
of bills of exchange drawn in good faith


against actually existing values, and the dis-
count of commercial or business paper actually
owned by the person negotiating the same, shall
not be considered as money borrowed.
VIOLATIONS Every such loan made in viola-
REMEDIES, ' tion of the provisions hereof
LIABILITIES gj^^jj y^^ ^^^ ^^^ payable ac-
cording to its terms, and the remedy for the
recovery of any money loaned in violation of
the provisions hereof, or for the enforcement
of any agreement, collateral or otherwise, made
in connection with any such loan, shall not be
held to be impaired, affected or prohibited by
reason of such violation, but such remedy shall
exist notwithstanding the same. But every
director of any such association who shall vio-
late, or participate in, or assent to such viola-
tion, or who shall permit any of the officers,
agents or servants of the association to violate
the provisions hereof, shall be held liable in his
personal and individual capacity for all dam-
ages which the association, its stockholders or
any other person shall have sustained in con-
sequence of iuch violation.


It shall not be lawful for any
OFFICERS bank to loan to its president

or to any of its vice-presidents
or its salaried officers or employees, or to cor-
porations or firms controlled by them, or in the
management of which any of them are actively
engaged, until an application for such loan
shall have been first approved, both as to secu-
rity and amount, by the board of directors.
(Section 10.)

Banks or banking associations


STOCK, may be organized under the

UQumATiON Pi-ovisions of this Act in all
cities, towns, and villages with
a minimum capital stock according to the popu-
lation of such cities, towns, and villages, as
follows :

In all cities, towns and villages of not ex-
ceeding five thousand inhabit-

MINIMUM i-Pi. 1. n j.i, j

CAPITAL ants, 01 twenty-nve thousand

In all cities, towns and villages of over five
thousand inhabitants and less than ten thousand
inhabitants, of fifty thousand dollars.


In all cities, towns and villages of ten thou-
sand inhabitants and less than fifty thousand
inhabitants, of one hundred thousand dollars.

In all cities, and towns of fifty thousand in-
habitants or more, of two hundred thousand

IMPAIRMENT Should the capital stock of any
OF bank organized under this Act

become impaired, the Auditor
shall give notice to the president to have the
impairment made good by assessment of the
stockholders or a reduction of the capital stock
ASSESSMENT °^ such bank, if the reduction

should not bring the capital be-
low the provisions of this section; and if the
capital stock of said bank shall remain im-
paired for thirty days after notice by the
Auditor, he shall have power, and it is hereby
made his duty, to enter suit against each stock-
holder in the name of the People of the State
of Illinois, for the use of said bank, for his or
her pro rata proportion of such impairment,
and when collected shall pay over the amount
thereof to said bank, and the judgment in such


case shall be for the amount claimed with all
costs and reasonable attorney's fees, which fees
shall be fixed by the court; or, if it appears
from the reports made to the Auditor under this
Act, or from any examination made by or on
behalf of the Auditor, that the conditions of
any bank organized under this Act are such
that the impairment cannot be made good, or
that the business of any such bank is being con-
ducted in an illegal, fraudulent or unsafe man-
ner, he may, in his discretion, without having
taken the steps provided in this section to make
good the impaired capital stock, through the
Attorney General, file a bill in the circuit court
of the county in which said bank is located, in
the name of the People of the State of Illinois
against said bank and its stockholders for the

dissolution of the corporation

DISSOLUTION, in . . .. J n

RECEIVER aJ^d tor an mjunction, and tor

the appointment of a receiver
for the winding up of the affairs of the bank.
And said court, upon presentation of said bill,
and upon being made satisfied that the capital
stock of said bank has become impaired to such


an extent that it cannot be made good, or that
such bank is being conducted in an illegal,
fraudulent or unsafe manner, shall immediately
appoint a competent and disinterested person
as such receiver, and shall determine and fix
his bonds and shall prescribe his duties. And
said cause shall proceed as other cases in equity.
And no bill shall be filed nor proceedings com-
menced in any court for the dissolution or for
the winding up of the affairs or for the ap-
pointment of a receiver for any such banking
corporation on the grounds of insolvency or im-
pairment of the capital stock of such banking
corporation or upon the ground that such bank
is being conducted in an illegal, fraudulent or
unsafe manner, except in the name and by the
authority of the Auditor of Public Accounts,
represented by the Attorney General. WTien
it shall be ascertained, in the course of the ad-
ministration of the estate of a bank in the hands
of a receiver that the assets of the bank are in-
sufficient to discharge the entire liability of
such bank to its creditors, and when the amount
of such deficiency is determined, the court may^


in its discretion, direct the re-
ment'^OF ceiver to proceed to enforce the

STOCK- liability of the stockholders to


LIABILITY creditors, provided in section

six of this Act; and when so
directed, such receiver shall have the power, and
it shall be his duty, to take such action, by suit
or otherwise, as the court may direct, to enforce
such liability for the benefit of the creditors and
to disburse to creditors the amounts collected
thereon, in the same manner as disbursements
are made to creditors of the assets of the bank.

Such receiver shall file with the Auditor a copy
of each report which he makes to the court
appointing him in order that the said Auditor
may have at his command a complete record of
all State institutions whose business has been
so liquidated.

At any time, whenever a majority in num-
ber and amount of the creditors of any such
bank or association, after any such receiver
shall have been appointed, shall petition the
court for the appointment of any person nomi-
nated by them as receiver, who is a reputable


person and elector of the county in which said
bank or association is located, it shall be the
duty of the court to make such appointment,
and all the rights and duties of its predecessors
shall at once devolve upon such appointee.
(Section 11.)

Whenever the board of direct-

T?orf^'"'°^ ors, managers or trustees, of
CHANGE OF any corporation havinff any

NAME. u ' 1 • • i.- U

PLACE OF banking powers, existing by

CHAN^cfEs' IN virtue of any general or special
MANAGE- law of this State, or any cor-


HOW MADE poration with banking powers
hereafter organized under the
provisions of this Act may desire to change the
name, to change the place of business, to in-
crease or decrease the capital stock, to increase
or decrease the number of directors, managers
or trustees, or to consolidate such corporation
with any other corporation having banking
powers which may hereafter exist, they may
call a special meeting of the stockholders of
such corporation for the purpose of submitting
to a vote of such stockholders the question of


such change of name, change of place of busi-
ness, increase or decrease of number of direc-
tors, managers or trustees, increase or decrease
of capital stock, or consolidation with some
other corporation, as the case may be: Provided,
that in changing the name of any corporation
under the provisions hereof, no name shall be
assumed or adopted by any corporation organ-
ized under the laws of this State, without the
consent of such other corporation, and that in
no case shall the capital stock be diminished to
the prejudice of the creditors of such corpora-
tion, or the number of directors, managers or
trustees be reduced to less than five, or in-
creased to more than eleven.

Such special meeting shall be


MEETINGS called by delivering personally,

or by depositing in the postoffice
at least thirty days before the time fixed for
such meeting, a notice properly addressed to
each stockholder, signed by a majority of said
directors, managers or trustees, stating the
time, place and object of such meeting. A
general notice of the time, place and object of


such meeting shall also be published for three
successive weeks in some newspaper printed in
or nearest to the county in which the principal
business office of said corporation is located.

At any such meeting stockhold-

VOTING i. • 1.

ON SAME crs may vote m person or by

proxy, each stockholder being
entitled to one vote for each share of stock
held by him, and votes representing two-thirds
of all the stock of the corporation shall be
necessary for the adoption of the proposed
change of name, place of business, number of
directors, managers or trustees, amount of cap-
ital stock, or consolidation with some other

At any rea^ular meeting, or at

CERTIFICATE .r .- j i -n j •

OF STOCK- the time and place specmed in
CONS^ent' ^^^^ notice of a special meeting

called for that purpose, said
propositions, or any of them, may be submitted
to a vote, and if it shall appear that two-thirds
of all the votes represented by the whole stock
of such corporation are in favor of the proposi-
tions, or any of them so submitted, a certificate


thereof, verified by the affidavit of the presi-
dent, and under seal of the corporation, shall
be filed in the office of the Auditor, and a like
certificate filed for record in the office of the
recorder of deeds of the county where the prin-
cipal business office of such corporation is lo-
cated; and upon the filing of such certificates
the changes proposed and voted for at such
meeting, as to name, place of business, increase
or decrease of capital stock, or number of di-
rectors, managers, or trustees, or consolidation
with some other company, shall be and is here-
by declared accomplished, in accordance with

the said vote of the stockhold-
BANKS crs: And, provided, further,

TH?S^ACT^° that any corporation with bank-
ing powers availing itself of or
accepting the benefits of, or formed under this
Act, and all corporations with banking powers
existing by virtue of any special charter or gen-
eral law of this State, shall be subject to the
provisions and requirements of this Act in every
particular, as if organized under this Act.
Such corporation shall, upon the filing of


said certificate, cause to be published in some

1 3

Online Librarystatutes Illinois. LawsThe banking laws of Illinois → online text (page 1 of 3)