J. MILLARD TAWES, GOVERNOR 15

habitants; a minimum sum of twenty-five thousand dollars
($25, 000. 00) in cities, towns or villages having more than fifteen
thousand (15, 000) but less than one hundred thousand (100, 000) in-
habitants; a minimum sum of fifty thousand dollars ($50, 000. 00) in
cities, towns or villages having one hundred thousand (100, 000) or
more inhabitants. The number of inhabitants of the city, town or
village shall be determined by the Director in accordance with the
latest federal census. The minimum aggregate amount of free share
accounts hereinbefore provided shall be maintained at all times by
any association incorporated hereunder.

(2) The incorporators, in addition to the payment of initial sub-
scriptions to free share accounts herein required, shall also pay or
cause to be paid to the chairman of the incorporators in cash a sum
equal to six per cent (6%) of the required initial subscriptions, which
amount, if the association be incorporated, shall become and be
credited to the general reserve fund of the association f or a period of
five (5) years or until said general reserve fund, less the amount
required to be paid under this sub-section, reaches at least six per
cent (6%) of the withdrawal value of the association's free share
accounts, whichever shall first occur. The incorporators shall also
execute and deliver to the Director such assignment, pledge and
delivery of accounts in such association in escrow, as the Director in
his discretion may require to guarantee such association against
operating deficits and against losses of any kind which exceed other
reserves. This sub-section shall not be construed as applying to as-
sociations in existence at the effective date of this sub-section.

(b) Expense fund for incorporation and organization. The in-
corporators shall create an expense fund in an amount not less than
one-half (^l/2) of the minimum amount of free share subscriptions
required to be paid in under sub-section (a) (1) hereof, which shall
be in addition thereto, from which expense fund the expense of
organizing the association and its operating expenses may be paid
until such time as its earnings are sufficient to pay its operating
expenses in addition to such dividends as may be declared and paid
or credited to its free share account holders from its earnings. The
incorporators shall deposit to the credit of the chairman of the in-
corporators in cash the amount of the expense fund. The amounts
contributed to the expense fund by the incorporators shall not con-
stitute a liability of the association except as hereinafter provided.

(e) Chairman of incorporators to procure surety bond. The chair-
man of the incorporators shall procure from a surety company
qualified to do business in the State of Maryland a surety bond in
form approved by the Director in an amount at least equal to the
amount subscribed by the incorporators plus the reserve and expense
funds. Such bond shall name the Director as obligee and shall be
delivered to him. It shall guarantee the safekeeping of the funds
subscribed and their delivery to the association after the issuance of
the certificate of incorporation. In the event of the failure to com-
plete organization, such bond shall guarantee the return of the
amounts collected to the^ respective subscribers or their assigns, less
reasonable expenses which shall be deducted from the expense fund.

(d) Repayment of contributions made to expense fund. Contribu-
tions made by the incorporators to the expense fund may be repaid
pro rata to the contributors from the net earnings of the association