ions as the people desire for the management of banks. Any
bank chartered by the state government is subject simply to the laws of
the state pertaining to banks and is called a state bank, whatever the
name under which it does business.

The laws of the different states vary indefinitely, but the essentials of
a banking law quite recently established in one of the states may serve to
illustrate the modern ideals as to safe, legitimate banking. Under this
law a bank must be a corporation of not less than five persons who have
subscribed for the entire stock and have paid at least 50 per cent of the
value of this stock before beginning business, with provision for payment
of 10 per cent each month until the whole of the capital stock is paid for
in cash. Each stock-holder is individually liable to an amount equal to
the value of his stock for any debts of the bank in excess of its original
stock. Having settled upon a name distinct from all others, its
application is made to a bank commissioner for a charter to do business in
banking according to the laws of the state. Under the charter issued by
the commissioner, the bank is required to be managed by a board of
directors, from five to thirteen in number, which board elects the needed
officers and appoints the necessary clerks. It cannot increase its capital
except by fully paid stock, and can do no other kind of business, like
buying and selling of goods and lands, or managing factories and
railroads. It is authorized to receive deposits and make loans at interest
not above legal rate, provided it keeps on hand available funds, including
bank balances, amounting to 20 per cent of its total deposits, and never
loans to one individual or firm more than 15 per cent of the paid up
capital of the bank. A penalty of fine and imprisonment follows conviction
of any officer for receiving deposits after general insolvency is known.

Each bank is required to report to the commissioner at least quarterly,
and whenever called upon to publish its report; while failure to comply
with requirements of the commissioner in report or otherwise brings
immediate forfeiture of the charter. The commissioner or his deputy must
visit each bank at least once a year and whenever occasion may require.
If, upon examination, a bank is found insolvent the commissioner himself
takes charge of the business for final settlement of its affairs. These
important restrictions and careful inspection are thought