J. MILLARD TAWES, GOVERNOR                               209

in cash to such chairman as subscriptions to free share accounts of
the proposed association, including that part of the original sub-
scription paid by such chairman, an aggregate amount, determined
by the location of the principal office of the proposed association, as
follows: a minimum sum of ten thousand dollars ($10,000.00) in
cities, towns or villages having up to fifteen thousand (15,000),
inhabitants; 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) inhabitants;
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 Board 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 asso-
ciation 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 for 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 asso-
ciations 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 (½) 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 or-
ganizing 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.

(c)  Chairman of incorporators to procure surety bond. The chair-
man of the incorporators shall procure from a surety company quali-
fied 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 bonds 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 certifi-
cate of incorporation. In the event of the failure to complete or-
ganization, such bond shall guarantee the return of the amounts