THE CUBA REVIEW 



the bank shall make no loans nor pay out dividends and shall order the Board of 

 Directors to impose a levy pro rata among the stockholders in order to make up 

 the loss, and said loss should be made up within thirty days after the resolution has 

 been adopted. In the case of failure to pay, either the bank through its legal representa- 

 tive, the President, or the National Banking Commission, through its President, shall 

 have an action to demand payment of the indebtedness by the stockholders. 



128. All banks governed by this Law shall be obliged to have a surplus fund 

 amounting to 20 per cent, above its capital; and while the bank fails to have said fxmd, 

 it shall not be able to utilize more than 70 per cent, of its profits for the payment 

 of stockholders' dividends, using the remaining 30 per cent, to make up the surplus 

 or reserve fund. 



129. No official or employee may request any compensation nor stipend for the 

 negotiation or concession of any loan, and if he does so he shall incur in the criminal 

 penalty for bribery, which shall also be placed upon the person that made the offer 

 or delivered the gift. 



130. It is absolutely prohibited under a fine of $5,000 as penalty, that banks 

 make loans on or negotiations based on their own shares. In the event that these 

 have been acquired through judicial execution or attachment or in payment of any 

 debt to the bank, they shall be sold to the public within 30 days. 



On Official Inspection of Banks 



131. All the banks of the republic are subject, in so far as regards the inspection 

 and examination of their books, to the National Banking Commission and to the Reserve 

 Bank of Cuba. 



132. The above mentioned Commission and the Reserve Bank are authorized 

 to order that the books and operations of the banks be inspected, twice a year at 

 least, by experts, in order to determinate whether they conform to the requirements 

 of the Law. Copies of these reports shall be sent not only to the National Banking 

 Commission, but also to the Reserve Bank. 



133. The Reserve Bank of Cuba shall establish a Department of Banking Inspec- 

 tion, made up of experts in public accounting and bookkeeping and in banking operations, 

 who shall receive proper compensation and who shall have charge of the inspection 

 and examination of the books, accounting and operations of the banks. 



134. The banks shall remit a statement of their condition to the National Banking 

 Commission and to the Reserve Bank of Cuba, whenever they so request, or at least 

 twice a year, in a clear and detailed manner. 



135. All the powers which in the matter of banking inspection and supervision 

 are conferred upon the Department of Agriculture, Commerce and Labor by Decree 

 1123 of October, 1909, are hereby transferred to the National Banking Commission 

 or to the Reserv^e Bank of Cuba. 



136. In the event that it should appear from the examination or statement of a 

 bank that it does not comply with the Law, the National Banking Commission shall 

 order it to take proper steps to adjust its operations to the terms of the same, and 

 if this were not possible, it shall order its liquidation, aside from the responsibilities 

 which this act provides foi; violation of its precepts. 



On Civil and Criminal Responsibilities 



137. Private bankers will be civilly responsible with all their present and future 

 properties for the operations which they effect and obligations which they contract. 

 Regular collective partners shall be responsible in the same manner without any need 

 of making prior excussion of the partnership property. Silent partners shall be 

 responsible up to the amount of the capital paid in by them and another equal 

 amount, and in this case also it shall not be necessary to make excussion of properties 

 in order to demand civil responsibility of the partners. The shareholders of a banking 



