the proceeds paid into the treasury, the date of the issue, of the redemption, and the other conditions of the contract, for the information of the public.

ART. 15. The dividends of distributable earnings shall be decided on in general meeting of the stockholders after the balance has been approved by them, and can not be made except from net and collected earnings after the deduction of the part which must be applied to the reserve fund.

ART. 16. The regulations shall include the provisions relative to the administrative order of the corporation and to the directions of its operations, proceeding in conformity with the bases established in the articles of incorporation. ART. 17. Whatever reform or amplification may be made in the contract of incorporation it shall be attended with the same formalities as are prescribed for its constitution.

CHAPTER II.-The approval, registry, and constitution of corporations.

ART. 18. The governor-general of the colonial provinces shall have the power of approving the constitution of mercantile stock companies whose object may be purely industrial.

In this declaration are not included the companies which propose the execution or operation of public works or which are to enter on operations of credit, issue, drafts, loans, and discounts, which have to be submitted for the approval of the government.

In either case, the governors-general shall begin the proceedings, in order to remit them to the colonial department, if corporations which require royal approval are in question, or to decide thereon themselves, if they should be such as come within their power to do so.

ART. 19. It is not lawful to open subscriptions in the colonies for the constitution of corporations without the permission of the governor-general. For this purpose the interested persons shall demand the authorization, showing the object and the fundamental bases of the corporation which it is proposed to establish. When the authorization for the subscription is obtained, it shall be proceeded with, and before the period of six months the final petition of the corporation shall be presented, for which purpose the proceedings provided by the following articles shall be observed.

ART. 20. When asking for the approval of a corporation, there shall be accompanied the following documents:

First. The original copy of the articles of incorporation.

Second. A copy of the regulations and of the resolution of the meeting at which they shall have been discussed and approved.

Third. A sworn statement of the stock subscribed for, which shall be at least one-half of the capital stock.

ART. 21. The governor-general of the island shall collect the facts and ask for the reports which may be deemed convenient, always hearing that of the board of commerce and of the economic society, if they exist, and shall always hear, for their information, the association or associations close to or bordering on the same class of roads, when the question concerns railroads or their extension; and lastly, adding the opinion of the council of administration. When the proceedings are sufficiently full, they shall be sent to the colonial department, if one of the corporations included in the second paragraph of article 18 of these regulations is in question, in order that the royal approval may be given on hearing the council of state; but if the company should be one of those included in the first paragraph of said article, it shall be approved or disapproved by the governor-general, who shall make a report concerning his decision to the department, if it be in accordance with the opinion of the council of administration, and also of the entire proceedings if the latter should not be in conformity with the said opinion.

The decree which approves the corporation shall be necessarily literally copied in the margin of the body of the instrument, and shall call the attention of interested parties that they shall consult in the register treated of by articles 22 and 290 of the Code of Commerce, within fifteen days, counting from the day that the Government clerk issues the instrument, regulations, and approval; all of which shall appear in the proceedings, which shall be signed by the representatives elected by the stockholders, with the penalty that otherwise the provisions of article 28 of the code shall be observed.

ART. 22. If it should be necessary to make any change in the articles of incorporation and the regulations in order that the company may have the conditions required for its approval, this fact should be brought to the attention of

the interested parties, and if they accept them a new instrument shall be executed, or the changes of the regulations which may be demanded may be introduced into the old ones.

ART. 23. The official who has charge of the general register, according to the provisions of article 23 of the Code of Commerce, shall send to the Government a certificate showing that the corporation has been inscribed, in order that this may be annexed to the proceedings of approval.

ART. 24. A copy of the by-laws, regulations, and approval of the corporation shall be sent to the court of first instance of the district.

CHAPTER III. Mutual obligations of stockholders and managers.

ART. 25. Shares of stock may be asked for by letters, and these shall carry with them the obligation of paying the amount in the manner established by the articles of incorporation. The organizers of the corporation shall be responsible for the authenticity of the subscriptions.

ART. 26. The stockholders may not escape the punctual payment of the assessments which the management may impose at the times determined by the regulations; and if they are not paid, the company may decide either to exact the amount by suit, adding interest because of the delay, or by the sale of the stock at current prices by means of a board of brokers, observing in the transfer the formalities prescribed by Article 11.

ART. 27. The personal and the real property which may be brought by any stockholder to the corporation, in order that they may be refunded in its capital, shall be conventionally appraised between the interested party and the actual management, or by experts, if these should be agreed on, the value being delivered in shares in favor of the one who may have made the assignment. ART. 28. In the same manner the same proceedings shall be followed with stockholders who assign to the company a patent, with those who contract to give their scientific or artistic services as active members of the corporation, and with those who shall have promoted the corporation. In all these cases the cash amount which should be paid shall be conventionally fixed upon and then the said amount shall be converted into stock.

ART. 29. An essential condition of every corporation is the distribution of the profits in equal parts among the shares, whatever may be the number which each stockholder may own. None of these, whether on account of being an incorporator or for any other reason, shall reserve the ownership in whole or in part of the association, nor the administration or business management or the irrevocable ownership of the stock.

ART. 30. The stockholders shall have a right of discussion and vote in the general meetings, in conformity with the provisions of the by-laws and regulations of the company. The representation of the wife by the husband can never be prohibited, nor of the minor by his guardian, nor of the absentee by his attorney in fact, nor of corporations and public institutions by their legitimate managers. Outside of the cases in which said legal representation shall hold good, there can not be admitted in the general meetings as attorneys in fact, those who are not actual stockholders, and never may the stockholder collect, either in his own right or by means of representation which might be given him, a greater number of votes than that allowed to the holder of the greatest number of shares of stock.

ART. 31. The powers of attorney for general meetings may be given by means of letters when the persons conferring the same shall reside in the place where the meetings are held, or by a special power, necessarily executed with all the legal requisites, if they reside elsewhere.

ART. 32. Those stockholders who shall not have been so at least three months previously to the meetings, may not take part in the general meetings.

ART. 33. When the by-laws do not provide to the contrary concerning the right of discussion and vote of the stockholders in general meetings, it shall be understood that only those may take part therein with the right of discussion and vote who have representation in stock of the company to the amount of 1,000 pesos; that for each 1,000 pesos of representation there shall be a vote until 10 is reached, not admitting the fraction of a vote; and that in no case shall the number of votes of a single stockholder exceed 10, whatever may be the part of the capital stock which he represents.

ART. 34. The absence of the stockholders from the meetings shall deprive them of the right of contradicting or opposing the resolutions of the majority, when

the resolutions shall not be contrary to the by-laws of the corporations or to those regulations.

ART. 35. The general meetings shall not be declared constituted for deliberation unless there is represented by those present more than half of the capital stock. Whenever said representation is not convened, a second call with at least eight days' notice shall be made, with a statement of the purpose of the meeting, and further stating that the meeting shall be held whatever might be the number and representation of the stockholders who might be present.

ART. 36. The balances and their vouchers, as well as the books and other documents necessary for the examination of its management, shall be at the disposal of the stockholders, in order that they may become acquainted with all the operations one month previously to the days fixed for the general meetings, and on the latter occasion the stockholders may make the observations and claims useful for the common interest which might be suggested by such examination.

ART. 37. The stock subscribed in the register shall be the subject of attachment, alienation, and award at the instance of private creditors of the stockholders. In case of alienation or award, the buyer or the one to whom the award is made shall be subrogated in the place of the stockholder to all his rights and obligations.

ART. 38. Active stockholders referred to in article 28 who agree to lend their scientific or artistic services to the association can not occupy themselves in any kind of business on their own account without the express permission to do so appearing either in the articles of incorporation or the regulations.

ART. 39. The managers of corporations shall be removable at the will of the stockholders in cases of just cause, in conformity with the law and with what may be determined in this respect in the articles of incorporation.

ART. 40. Within fifteen days after the company shall have been declared to be constituted the management shall show to the Governor-General that they have made the deposit of the shares of stock as a guarantee, and this document shall be annexed to the proceedings of the approval.

ART. 41. The funds of the companies may not be taken from the treasury for negotiations foreign to their objects, and their managers can not under any consideration either enter into or intervene in business concerning the same object if it should not be on account of the company. The breach of this rule shall always be punished in cases of managers by a fine which shall not be less than 1,000 pesos nor more than 5,000. Besides, they shall be directly and immediately responsible for whatever amount they may have disposed of in contravention of this prohibition, and the profits of the business which they have made shall belong to the company, the managers being charged with the insolvency which might result.

ART. 42. Notwithstanding the provisions of the preceding article, whenever there are surplus sums in the treasury the managers may apply the same to the discount of obligations, the times of which do not exceed ninety days, if they are guaranteed by signatures of acknowledged credit; but even in such cases, if insolvency should result, they shall be required to indemnify the treas ury of the company. For the loans and discounts made outside of these cases, or without the circumstances stated, there shall be applicable the penalty of the preceding article.

ART. 43. The remuneration of the managers shall be a fixed salary, a part of the distributable earnings, or both; but this shall be provided for by the by-laws and regulations.

ART. 44. The managers should be obligated to carry out and see that there are carried out the provisions of the articles of incorporation and of the regulations.

CHAPTER IV.-The termination and liquidation of corporations.

ART. 45. Corporations shall be dissolved

First. Because the time fixed in the contract of incorporation has expired. or because the special work for which they were organized has been completed. Second. For having lost all the capital stock or that part which shall be fixed for this purpose in the instrument.

Third. Because the object of the formation of the company can not be carried out.

Fourth. Because the corporation has become insolvent.

ART. 46. From the time that the case of dissolution arrives the management shall cease to make new contracts or obligations, and its power shall be limited,

in the character of liquidation, to collecting the credits of the company and paying the obligations as they fall due.

ART. 47. If there should be objection to the continuation of the management, the general meeting shall decide what may be proper; and in case it shall be decided that it cease the performance of its duties, the same meeting shall proceed to the appointment of two more liquidators, either stockholders or strangers to the company.

ART. 48. The management shall, within fifteen days immediately following dissolution, draw an inventory and a balance of the common funds, which shall be brought to the attention of the general meeting. If it should omit to do so, the same meeting may establish an investigation to ascertain these facts at the cost of the management.

ART. 49. In case liquidators distinct from the management are appointed, in conformity with article 47, there shall be delivered to them the property of the corporation which appears by the inventory and the balance which may have been made, after they have first given a bond in an amount to be fixed by the meeting which selects them.

ART. 50. Whoever may be the liquidators they shall be obligated to make a monthly statement of the liquidation, which shall be published in the official newspaper of the town in which the company is situate.

ART. 51. The remuneration of the liquidators shall be fixed by the general meeting.

ART. 52. The liquidators shall be responsible to the stockholders for whatever damage the company may suffer by fraud or negligence in the fulfillment of their duties, and can not make any compromise or agreement whatsoever concerning the interests of the company unless the stockholders shall have expressly authorized them for this purpose.

ART. 53. In the examination and inspection of the credits, as well as in the graduation and payment of the creditors, the provisions of titles 7 and 8, book 4 of the Code of Commerce, shall be observed.

ART. 54. As soon as the condition of the liquidation permits it a general meeting shall be held to decide on the division of the common property, which shall be made by the liquidators within the period specified at the meeting.

ART. 55. After the division has been made there shall be another general meeting, which may approve or disapprove it, stating in the latter case the objections and deciding on the means of overcoming them. The stockholders who shall not have been present at the approval may make claims which they believe to be just within the fifteen days following the calling of the meeting in which the approval was given; and if they do not make use of this right it shall be understood that they have agreed to the operations which have been carried out.

ART. 56. These claims shall be decided on by arbitrators, who shall be named by the parties within eight days following their presentation, and if this appointment is not thus made it shall be made officially by the competent tribunal. ART. 57. In the liquidation of corporations in which minors have an interest their guardians shall act with full powers, as if they were engaged in their own business, and all the measures which they may take or consent to in the name of such minors shall be valid and irrevocable without the right of the benefit of restitution, without prejudice to the responsibility which they may contract because they have not proceeded with due diligence or with culpable negligence.

ART. 58. No stockholder may ask the delivery of common property while there shall not have been extinguished the assessments due the company or their value deposited if the payment can not possibly be made in cash.

ART. 59. The stockholders have the right to exact from the liquidators as much information as may interest them concerning the liquidation and pending operations.

ART. 60. The books and papers of the companies shall be preserved, under the responsibility of the liquidators, until complete liquidation and payment of all those who, by reason of any title whatsoever, may be interested in the property. ART. 61. Those charged with the liquidation of corporations shall be obligated to notify the Government which approved the conclusion thereof, accompanying the certification of the resolution of the general meeting in which it may have been approved, which shall be published in the official newspaper of the capital of the town in which the company shall be domiciled.

ART. 62. The provisions of these regulations shall not have a retroactive effect, and consequently shall include only the associations which are formed

after its publication. Those constituted before shall only be obliged to submit for superior approval the changes which they may make in their by-laws and regulations.

SIR: Although the banks of issue and discount are founded and constituted generally by corporations, they must submit to a special legislation which in given classes of business permits them to operate with great freedom, while concerning others they are obliged to adopt precautions and formalities which are not exacted from all kinds of mercantile and industrial associations. The vast sphere of action which belongs to them; the mutual aid which the public administration and banks lend one another; the most singular privilege which these enjoy of issuing notes which the Government, the corporations, and individuals receive in lieu of coined money, and many other considerations justify the prescription of guarantees which make impossible or remove the eventuality of these great banking crises which absorb public fortunes as well as private. ART. 4. The Government shall demand the deposit from the incorporators before granting them the concession. This shall be forfeited with loss of the deposit four months after its date in Cuba and Puerto Rico and six months in the Philippines if the establishment of the bank shall not have taken place before that time. This term may be extended for two and three months, respectively.

ART. 5. No bank may begin its business unless it has in its coffers 25 per cent of its capital. The proceedings of installation shall be submitted for the approval of the Government.

ART. 6. The stock referred to in article 30 of the regulations of this date concerning corporations shall not exceed 20 per cent of the actual capital which may have come into the treasury.

ART. 7. The life of each bank shall be twenty-five years, to count from the day of the concession. This time shall be extended on the petition of the general meeting of stockholders, made one year before its expiration, and after the same proceedings which are necessary for the creation of the banks.

ART. 8. The stock of these institutions of credit shall be 500 pesetas each. The stockholders of the banks shall only be responsible for the amount of their respective shares.

ART. 9. The banks shall have the power to issue an amount of notes to bearer equal to three times their capital, with the obligation to keep in its treasury in current gold or silver coin, or bars of the same metal, at least one-third of the amount in circulation. These notes shall be divided in series of the amounts which the bank may deem necessary to facilitate transactions, but the lowest of said sums can not be less than 25 pesetas nor more than 1,000.

ART. 10. The counterfeiting of notes shall be prosecuted officially with all activity and energy as a public crime and punished with the rigor of the laws. ART. 11. The banks shall establish branches in the most important places of the territory in which they operate in order to attend to the necessities of commerce and to the circulation of the notes.

ART. 12. In each branch there shall be placed the amount of notes which the importance of its operations may require, which shall be distinguished by a seal which indicates the places to which they belong. The by-laws and regulations shall state the form in which these may be changed and in which the notes may be paid for at places in which they have not their origin.

ART. 13. Foreigners may become stockholders of the banks, but can not take part in the management, nor if they are not domiciled in the kingdom and have besides a certificate of naturalization, in accordance with the laws, and they may also become correspondents abroad and form agencies either singly or in committee whenever they unite and represent stock to an amount of 10 per cent at least of the capital of the bank.