New-York tribune., 1869-05-27
THE NATIONAL BANKS.
CAN A NATIONAL BANK RETURN TO THE STATE
SYSTEM UNDER THE ENABLING ACT PASSED
BY THE NEW-YORK LEGISLATURE R-DE-
Ir rr-N

CAN A NATIONAL BANK RETURN TO THE STATE
SYSTEM UNDER THE ENABLING ACT PASSED
BY THE NEw-YORK LEGISLATURE 2-DE-
CIs1ON OF ATTORNEY GENERAL HoAR.
WASHINGTON, May 2G.-The following opin-
ion has just been promulgated
ATTORNEY GENERALS OFFICE, May IS, 1869.
SIR In you'letter of April 1869, transmitting copy
OF letter from the Controller Of the Currency Of the
same date calling attention 70 his letter OF Oct 15 1863
and referring 10 letter OF the late Secretary OF the
Treasury TO my predecessor OF Oct M 1865 you request
my advice upon the points presented Herewith, which
have been carefully considered, and upon which am
now prepared to submit my opinion. The Controller
states in his letter OF April that he is informed and
has reason 10 believe, that number Of National Banks
In the City and State Of NewYork In order to avoid the
restrictions and limitations imposed by the act OF
Congress, contemplate return TO the State SYSTEM
under what they call the enabling act, passed
by the eature OF that State for that purpose and in
his letter OF Oct IS 1885, he states that the President and
Directors of the National Mechanics and Farmers Bank
Congress TO provide national currency secured by
pledge OF United states bonds aud to provide for the
claim 10 converted their bank into State banking
association under the provisions Of an act passed by tho
Legislature OF the state OF NewYork April 90 1867,
entitled act enabling national banking associations
become state banking associations, &C. ana that Dy
virtue OF such conversion they are absOlved from all
allegiance aud responsibility rs national bank to this
Office and 10 the requirements Of the act OF Congress
am OF the opinion that It is not within the power Of the
Legislature Of NcwYork TO alter modify, add TO, or d.
mnish the powers duties liabilities created In or con-
act Of Congress The powers, privileges and duties OF
corporate body are wholly derived from the soyeregnt
which gave IL existence The Legislature Of NewYork
may undoubtedly incorporate or provide by law for the
incorporation OF banking associations III that state but
banking associations thus created new and distinct
bodies corporate. with which corporations deriving their
existence from the United states cannot be merged or IN
any manuer identified without the authority OF Congress
Any lawful contract which National Banking Assoea-
ton might make with private person. or with another
tioI established by the state OF NewYOrk for banking
purposes and authorized by that state 10 enter into such
n contract on the dissolution Of National Banking
Association in the manner provided by the laws,
the property OF such an Association may be
conpeeut by the local law receive such transfer
far s the restrictions Liabilities and duties imposed by
act Of Congress upon the corporation Wlndng up ts
affairs will admit But IL that IL Is mis-
use of language say that the national banking asso.
created by the laws Of the state or merged in H. and
can perceive power or authority existing IN the Legs
ature OF the State OF NeWIorK by which the property
of the national corporation shall by act of law and with
out any conveyance transfer be vested In aud become
statute Of NewYork may indeed provide for the creation
OF a corporation clothed with the capacity TO receive
ture Of that state may determine, aud as Tar
It's capacity TO receive is concerned the Les,atnre & OF
alton OF the capacity IA the new corporation Is an en
Inc Rational corporation It's property The powers aud
mode OF action Of the National corporation depend Who'll
y upou the action of tine National Legislature. am
further OF oplpou that hen q National Banking AssO
caon mas taken the proper measure for s own dssou
ton Ia conformity with It's articles OF association and
under the provisions Of the act Of Congress OF June
1901 such dissolution Is not complete un the necessary
action has been had Tor the redemption OF lts circulating
notes either by actually rcdeemng them and surrender
I'M them 10 Controller Of the Currency or By deposit
pg An amount OF Treasury notes with him adequate 10
mar redemption provided 5y that act aud that un
m these completed the existence OF the National
Baukng Association continues under the law, that It's
capital cannot be lawfully distributed among ts share
hoders transferred % any other body corporation
that IL remains under the supervision OF the Controller
OF the Currency In the manner and TO tho extent pre-
scrbed by the OF Congress 10 the same extent as be-
fore it, liquidation commenced; that II is still required
10 make regular aud proper reports and returns
of its condition 20 the Controller In the manner
prescribed by the statute that II Is subject to
The penalties which the statute provided Tor
failure 20 make such returns that Us obligation 20
keen ts reserve OF lawful money still continues that It's
directors must eth be the owners OF 80 much OF It's
cantal stock rs the statute directs, aud that 1t is un
Law mi 10 eudanger the lien Of the United states upon It's
assets by transfer OF them without other consideration
than the formation Of new banking association BY the
same stockholders. IL follows as consequence that
whatever remedies the act OF Congress gives for
violation Of It's PROVISIONS may be pursued by the Con-
troer OF the Currency. Whether such remedy Is TO be
fuud m obtaining decree Of forfeiture and the appoint
ment of Receiver by the eXactOn and collection Of
Denaltes or by Injunction from Court Of Equity 10
rer an act from which loss danger 20 the rights Of
tbe limited states may be reasonably appreheHded, will
depend OF the special facts OF the aud
unon The nature and extent OF the violations OF It's
c6rporate duty which the National Banking Association,
undertaking 70 dissolve It's corporate existence and
guid Ate ts affairs. may be found to commit return
mere 18th the paper transmitted. have the honor 10
i've respectfuily, your Obedlent servant,
T. X. HOAR, Attorney General
Tohe Hon GEO g. BOUTWELL,, Secretary Of The Treasury