, 1873-11-23
4 new QUESTION.
Can q National Bank Be Put
into Bankruptcy.
Tho Question Raised With Respect TO tho
Manufacturors' National.

A weok ago Saturday J. r. Smith i %. fled a
petition ngatnbt tho Manufacturers National
Bank. to throw 1t into bankruptcy, alleging that
tho bank vss thon debtor Of tho potttlonern to
tho amonnt Of 81, 500, on account Of money do
posted, which It had failed to pay for fourtoon
days after request for tho samo, and charging
that the bank had committed acts Of bankruptcy
In suspending payment Of said deposit, and,
also, by giving humorous preferential assign
monts to varioua persons, by turning ovcr paper
and securities In payment Of eundry creditora.
Tho uauAl rulo to show causo was not iHsucd,
but was doforrcd until MI arguncut could bo
hoard on the question ns to whothor 4 National
Bank could be put into bankruptcy. 11essra.
Harding, Mccoy Il Pratt and Mr. 7. q. Whito-
sdo appeared for petitioners, and argued that
tho powor was unguestionablo. Us the jurisdic-
tion Is expressly given by tic Banking act Of
1864, md also by the Bankrupt law Of 1867. The
Banking aot by the eighth and thirty-soyonth
sections. expressly givos to creditors tho right
to sue tho corporation ns thoy would othor nat
ura1 persons, Tho Bankrupt act was passed.
ncnrly thsco years after tho Banking
act, and morely gavo romcdy which creditor
under tho old Banking not had right to uao.
Tho bankrupt act confors tho nnmo powor by
the thirty-sovcnth Reotion, whcro 1t ID enid tho
Bankrupt act shall apply to all monoycd aud
fraudulontly nusponded paymlont Of l,in com
mcrcial paper 1t shall bo doomed m net Of
bankruptcy. Tho remedies arc other concur
ront or that given undor tho Bankrupt act is a
vide any acheno for tho bankruptcy Of banks,-
@ tIeir s nsolvenoy. t0 rheyyo ''suh Is only ooo 5os
provision made in tic Dankins: not ncs
for tho non-phymcnt OF anything,
and that Ia for the non-paynent Of tho circulat-
trollcr may sell tho bonds held by him, or, with
tho concurrence Of tho Secretary Of tho Treas
ury. havo Receiver appointed to distribute tho
assota but thoro is no provision for any other
. proceeding which tho Bal,king aet says e cred
itor shall lavc against bank, and tho policy Of
tho Bankrupt act is in perfect harmony with tho
Banking act. The fundamental error is iu sup
posing that the two uots aro inconsistent.
Judge Lawrcnco, associated with Messrs Aver
and Knlcs, for the bank, argued that the Comp
troler ie tho person appointed by law to wind mp
tho affairs Of tho bank. When q banki Is inpolrent
it can go Into voluntary liquidation aud sette ita
claims.. supposing mn Assignee worc to bo ap-
pointed, no person could bo found who, OF tho
sale Of tho nysotB, would bid anything near their
srue value when it wes known TINT tho Comp
trol1er could stop in and assort hostile
rights. Again, no Assignee, could rednco
u pUSSChhlou LQo O0QQ1 ucIu DY tho
United States. They might be sold
for tho benefit OF tho holders OF noton, and then
there would remain surplus in the bands Of
tho aovernmont,-as which could not bo ro-
duced to possession by tho Aasigroo. It ia inl-
possible to conceive Of grehter conflict than
would arise from this caugo. Thu act In oxiHt-
once provides for all emergencies, and for tho
aocurity Of tho Government. L bank cannot ho
put into bankruptcy unless tho Bank
rupt act repnals tho Banking not and
substltutes tho Bankrupt net, and
tho question is to determine which Of tho lawa
is in torco. Now, docs tho Bankrupt law repeal
tho Banking law !? In tho 8th Wallace tho ancs-
ton is Settled. Tho Court thero recognizes the
provisions Of tho Banking nct as in full force,
md Congress recognizes it as in full force. Tho
counsel on tho other 1ido must full back on tho
proposition that either Of the romedics aro ap-
plioable, ut tho discretion Of the Judge. By tho
act, tho banks arc required to keep on E.1d
enough to pay tho ordinary run OF their dopopit-
ora, which is fixed at 25 per cent Of
thoir notos; aud it is not the in
tontion that depositors shall bo allowed to
forco bank into bankruptcy in that mode.
If tho Bankrupt act woro to DO repeRlod to-
morrow, the banks could 60 on ns they hayo
dono under tho Banking Law. II tho depositors
during tho 1ate panic, when everyone waa appro-
honsiyo and doubtful where he stood could have
forced tho National Banks into bankruptcy, it
would have caused q universal crash oyor tho
country, and would have done moro than any
thing elso to make it hopolossly insulyont.
Tho argument was not concluded, but will bo
resumed when Judge Rlodgott shall have con-
Clldcd tho Howell case, now on tEial.