The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1869-05-27
ATTORNEY GENERAL HOAR.
An Important Opinion Relative to National
hanks Adopting the Old state Bank System.
Ihe following Opinion has inst heen nromnl-

8pRR05 Rs 8d dK"ts aad Has n2
The following opinion has just been promul-
gated
ATToRNEY-GENERALs OFFICE, May 16 1869.
-Slr:-ln your letter of April q, 1869, transmit
ting copy of a letter from the COMPTROLLER of
the Currency of the same date, calling attention
to his letter of October 1S, 1868, and referring
to a letter of the late Secretary of the Treasury
to my predecessor of October TO- 1868, you re-
quest my advice upon the points presented there
with, which have been carefully considered and
upon which | am now prepared to submit my
opinion. The Comptroller states in his letter of
April q that he is informed, and has reason to
believe, that quite number of national banks in
the city and State of New York, in order to
avoid the restrictions and limitations i'm
posed by act of Congress, contemplate a
return to the State system, under what
they now call the enabling act, passed
by the Legislature of that State for that purpose:
and in his letter of October Is, 1865 he states
that the President and directors of the National
Mechanics and Farmers Bank of Albany, an in
stitution organized under act of Congress to
provide national currency secured by pledge
of United States bonds, and to provide for the
circulation and redemption thereof passed June
., 1864, claim to have converted their bank into
a State banking association, under the provi-
sions of an act passed by the Legislature of the
State of New York, April 20, 1862, entitled Gan
act enabling national banking associations to
become State banking associations etc, and
that by virtue OF such conversions they are alb
solved from all allegiance and responsibility
as national bank to this Office, and to the re-
quirements of the act of Congress l am of the
opinion that it is not within the power of
the Legislature of New York to alter,
modify, add to, or diminish the powers, du-
ties or liabilities created in or conferred
upon banking association established under
act of Congress. The powers, privileges, and
duties of corporated body are wholly derived
from the sovereignty which gave it existence
The Legislature of New York may undoubtedly
incorporate or provide by law for the incorpora-
| ton of banking associations in that State but
| banking associations thus created are new and
| distinct bodies corporate with which corpora
| tiOns deriving their existence from the United
| States cannot be merged, or in any manneriden-
| titled, without authority of Congress. Any law
| full contract which national banking associa-
| tion might make with private person, or with
| another corporation, may undoubtedly be made
with corporation established by the State of
| New York for banking purposes, and authorized
| by that State to enter into such a contract on
| the dissolution of a national banking associa-
| tion, in the manner provided by the laws of the
| United States. The property of such an asso-
citation may be disposed of by its owners to any
other parties competent by the local law to re-
| ceve such transfer, so far as the restrictions
| liabilities, and duties imposed by act of Con-
gress upon the corporation winding up its affairs
| will admit.
But it seems to me that it is a misuse of Ian
| guage to say that the National Banking Associ-
| alton is in any sense changed into a banking
corporation created by the laws of the State and
|
| existing in the Legislature of New York by
| which the property of International corporation
| shall, by act OF law and without any conveyance
| or transfer, be vested and become the property
| of such State banking association. The statutes
| of New York city, indeed provide for the crea-
| ton OF corporation, clothed with the capacity
| to receive transfer of property in such manner
as the Legislature of the State may determine,
and as far as its capacity to receive is concerned,
the Legislature of that State has full control over
| the subject but the creation of the capacity on
| the new corporation is an entirely different
| thing from the attempt to transfer from the ma
| tional corporation its property. The powers and
| mode of action of the national corporation
| depend wholly upon the action of the National
| Legislature. i am further of the opinion that
| when a national banking association has taken
the proper measures for its own dissolution in
| conformity with its articles of association and
under the provisions of the act of Congress of
| June 3, 1864, such resolution is not complete
until the necessary action has been taken for the
| redemption of its circulating notes, either by
actually redeeming them and suTendering them
| to the Comptroller of the Currency, or by de-
posting an amount of Treasury notes with him
adequate to their redemption, as provided by
that act, and that until these acts are COM
| pleted the existence of the national banking
| association continues under the law; that its
capital cannot be lawfully distributed among
| its Shareholders or transferred to any other
| person or body corporate; that it remains under
| the supervision of the Comptroller of
| the Currency in the manner and to the
extent prescribed by act of Congress to the
same extent as before itsliquidation commenced;
that it is still required to make regular and
proper reports and returns of its condition to the
Comptroller in the manner required by the
statute; that 1t is subject to the penalty which
the statute provides for failure to make such
returns; that its obligation to keep its of
lawful money still continues; that its directors
must still be the owners of so much OF its capi-
tai stock as the statute directs, and that 1t is
unlawful to endanger the lien of the United
states upon its assets by a transfer of them,
without other consideration than the transform
ation of a new banking association by the
same stockholders. 1t follows as con,
sequence that whatever remedies the act OF
Congress gives for violation of its provisions
may be pursued by the Comptroller of the Cur
rency, whether such a remedy is to be found In
obtaining decree of forfeiture and the appoint
ment of a receiver, by the exaction and collec
] ton of penalties only on Injunction from cour