The legal management of commercial banks and loan and trust companies is vested in officers called directors, elected by the shareholders, and of savings banks in trustees, in the case of stock savings hanks elected by the shareholders, and in that of mutual savings banks chosen from the incorporators.

The usual qualifications of a director are that he shall be a citizen of the United States and the owner of ten shares of the stock of the bank or trust company, which stock shall be owned by the director in his own right and not pledged or in any way hypothecated as security for a loan.

In the case of National banks, at least three-fourths of the whole number of directors must have resided in the State, Territory or District where the bank is located for at least one year preceding their election, and must reside therein during their continuance in office. Any change in any one of these qualifications disqualifies a director and operates to make his position vacant. As a rule, directors are elected by the shareholders when a bank is organized, and after that at elections held annually. A director elected at such annual election holds the position until the next election is held, and cannot be displaced unless he voluntarily resigns or does something which will disqualify him.

Whenever a vacancy occurs in a board of directors, by resignation or otherwise, between elections, it can usually be filled by someone elected by the remaining directors.

The board of directors should meet frequently to supervise the affairs of the bank, hear reports of its business from its executive officers, and direct how this business should be conducted. Usually no business can legally be transacted at any directors' meeting unless a "quorum" is present - that is, a majority of the whole number of directors.

While the directors, as a body, are expected to supervise the business and direct same, still the details of the business must necessarily be carried out by the officers and employes appointed or elected by the board. The chief executive officers of a commercial bank of any size are the president, the vice-president, the cashier and the assistant cashier.

In large banks there may be more than one vice-president and more than one a assistant cashier if the business requires this.

In savings banks and loan and trust companies the title of the officer whose duties correspond to those of cashier in a commercial bank is "secretary" or "treasurer." The duties of the various officers named are approximately as follows:

The President always presides at any meeting of the board of directors or trustees, or acts as chairman. In his absence the vice-president acts in this capacity.

His chief function is to give general supervision to the business of the bank in its various departments; to exercise his judgment in the making of loans and other investments of the bank's funds, either alone or in consultation with other officers of the bank, or with a discount or finance committee, appointed by the board to act with him in such matters.

He is made responsible for all sums of money or property of any kind entrusted to his care by the board of directors or the cashier, or otherwise coming into his hands as president. Either he or the cashier is authorized to sign all contracts, checks, drafts, etc., on behalf of the bank, and also transfers and conveyances of real estate owned by the bank, when authorized by the board of directors to do this.

The president usually joins the cashier in signing the minutes of directors' meetings, certificates of stock when issued, and, in the case of National banks, signs reports of condition or reports of earnings and dividends in the place of the cashier, and signs circulating notes with the cashier.

While these are the usual duties of the president, they may be modified by the board of directors as circumstances may make desirable or requisite.

The Vice-president presides at directors' meetings in the absence of the president, and is usually authorized, in the absence or inability of the president from any cause, to perform all acts and duties pertaining to the office of president, except such as the president only is authorized by law to perform.

When the president is present for duty, the vice-president usually performs such duties as are assigned to him by the directors.

The Cashier is usually the chief executive officer of a bank so far as its routine management is concerned. He is usually made responsible for, and has control of, all the moneys, funds and valuables of the bank. He is authorized to sign all contracts, checks, drafts, etc., on behalf of the bank, such as certificates of deposit, cashier's checks or other vouchers for money or valuables entrusted to the bank for safe-keeping, and to sign checks or drafts for the purpose of transferring the funds of the bank from one place to another, or for paying its current expenses or other obligations. He is also authorized to certify cheeks drawn on the bank, and may delegate this power to the paying teller or some other officer. He can buy and sell exchange, coin and bullion where this is part of a bank's business; has the power to endorse paper entrusted to the bank for collection, and upon receipt of money in payment of contracts to endorse and deliver notes or drafts and collateral security representing same. But he has no right to endorse non-negotiable paper, or to compromise a debt to the bank, or change the terms of an original contract without express authority from the board of directors. Of course, he has no authority or right in his official capacity to endorse his own individual notes.

In cases of emergency he may, for the purpose of meeting the obligations of the bank, rediscount its negotiable paper or pledge its negotiable securities, in order to borrow money, and even to execute a promissory note on behalf of the bank for this purpose. But, except in case of an emergency, and as a safe rule, all borrowings by the bank and for its benefit should be made with the knowledge of and by the express authority of the board of directors.

These powers and duties of the cashier of a commercial bank are similar to those exercised by the secretary or treasurer of a savings bank or a loan and trust company, within such limitations, in special cases, as may be imposed by the directors or trustees.

The Assistant Cashier usually performs such duties as may be specially assigned to him by the directors, these usually being in the way of relieving the cashier of duties ordinarily devolving on him.