Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-10-04
LEGAL ASPECT OF SUSPENSION BIZ
NATIONAL BANKS.

NATIONAL BAN&A9.
1t sppears good deal of interest has been
manifested to learn the views of the Comp
troller of the Currency as to the legality Of
the suspension of currency payments to de-
positors by the National banks. A state.
ment has gained currency that he takes the
ground that such suspension is violation
of the law under which they are char tered.
He stated a few days ago that if national
hank should refuse to redeem its own notes
with legal tenders, and such notes were
protested, it would be his duty to appoint a
receiver forthwith to wind up the affairs OF
such bank, and that act would be forfeit
ure of the charter under which it operated.
But the question of the forfeiture of char
tered rights as result Of the non-payment
of depositors is new one, and the state
ment that the Comptroller Of the Currency
favored that view has caused no little ankle
ty on the part of bank managers. The
Washington correspondent of the Cincin-
natl Gazette writes:
WASHINGTON, Oct. IA mistaken i'm
preston has gained circulation that the
Comptroller Of Currency had approved that
part Of the New York system of certified
checks by which banks refused 10 pay de-
positors and do business wholly ON certified
checks. When the New 7 ork banks re
ported Their action for his approval, nothing
was said of the non-payment of depositors.
Il is significant OF the general favor with
which the course of banks is received, that
the Comptroller has received no formal
complaint on the part Of depositors from any
quarter.
The Washington correspondent of the
Cincinnati Commercial writes under the
same date:
WASHINGTON, Oct. 1.-Dispstches have
been sent from here within the<last few
days, relating to the attitude of the Comp
troller of the Currency towards National
Banks for refusing to pay currency to depo-
sitors and creditors and substituting certi-
fed checks instead. These dispatches re-
presented that the Comptroller had positive
ly stated that the action of the National
Banks in entering into such an arrangement
was illegal, and in direct violation of the
National Banking Act, and that the Comp
troller has no discretion ia all such
cases where applications were made
for the appointment of a Receiver.
When the paric first began and while
the union of the banks for the purpose of
protection was yet under discussion, TIE
question included in the above statement
was the one most seriously and exhaustive
ly discussed. Among the men who sane
toned such action were at least one hun
dred members of Congress, who helped to
make the law, and who now, as bank di-
rectors or presidents, a ded in constituting it.
So bold comuittal of the Comptrolle. to
the opposite theory has startled the business
and banking Interests of the country, and
Inquiries have been pouring in here from
all sections of the country inquiring as to
whether these were the real sentiments of
this official:
The Comptroller stated to- night that he
had never made any such statement, nor
was there any law authorizing any such &C.
ton on his part. The only section which
at all applies in this connection is the fol-
lowing provision of the National Banking
Act:
SECTION SO. That if the Directors of
any association shall openly violate or
knowingly permit any of the officers, agents
or servants Of the association to violate any
of the provisions of this act, all the rights,
privileges and franchises of the association
derived from this act shall be forfeited; such
shall, however, be determined and
adjudged by proper Circuit, District
or Territorial Court of the United States,
in a suit brought for that purpose by
the Comptroller of the Currency, in bis own
name, before the association shall be de-
clared dissolved; and in cases of such viola
ton every Director who participated in, or
assented to the same, shall be held liable in
bis personal and individual capacity for all
damages which ths association, its share
holders, or any other person shall have sus-
tanned in consequence of such violation"
Under this section the Comptroller holds
that any such question, If 1t could be properly
raised and suit instituted thereon would
simply be question of law for the courts
to decide.