the amounts carried to surplus in dividends, neither may it be by
charging losses to the surplus and at the same time using the other
earnings for dividends.

Moreover, section 5204 of the Revised Statutes of the United States
provides as follows: "If losses have at any time been sustained by any
such association, equal to or exceeding its undivided profits then on
hand, no dividend shall be made; and no dividend shall ever be made by
any association, while it continues its banking operations, to an amount
greater than its net profits then on hand, deducting therefrom its
losses and bad debts."

This language fixes the extent to which dividends may be made at the
amount of the "net profits" on hand after deducting therefrom losses and
bad debts, and as it has been shown above that the surplus fund cannot
be considered "net profits," available for dividends within the meaning
of the law, it follows that in order to determine the amount of net
earnings available for dividends the losses must first be deducted from
the earnings other than surplus.

It is to be observed also that section 5204 specifies that if losses
have at any time been sustained by a bank equal to or exceeding its
"_undivided_ profits" on hand no dividends shall be made.

Now the surplus fund is not undivided profits, except in so far as it is
earnings not divided among the shareholders. It is made upon a division
of the profits--so much to the stockholders and so much to the surplus
fund. If the law had intended that losses might be charged to surplus
fund in order to leave the other earnings available for dividends it is
to be presumed that care would not have been taken to use the words