The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1875-11-06

as taking or receiving greater
me facts Of the are few ana simple On the Cd
~, bPoer IS5 II was agreed between the parties
ma. Tearing should make his promissory note 10 ono
Deman for 81 900 payable one month from date and
.na we oahk should discount the note for Dearing at
a-r iss =. interest Of ten per per annum. This
agreement was carried out The bank received the
more more ana pad to bearing the sum OF al 9sl 81 Tho
discount reserved and tax was SIS az Tho rate III
interest which the bank was legally auho.,1ed ~ ta
was seven per cent per annum Tho excess reserved
over that rate was S. So bearing ballad IA nv M
note at maturity. The bank therenpon sned him II ,hc
superior Court OF Buffalo. He answered thai ina
agreement touching the discount was nsnrors . ~
and illegal, that il avoided the note ana that IL ~
in nowise liable TO the plaintiffs The Court sustained
this defence and gave judgment for tho dcfendan
the General Term OF that Court the Judgment was Al
| hrmed, and the Judgment OF a1lrmance was subss-
quently affirmed by the Court OF appeals
NO searching analysis is necessary TO eliminate tho
several provisions OF the section 10 considered 10
develop the true meaning OF each and to draw the
proper conclusions from all OF them taken together
Etrst-The rate OF interest chargeabe by each bank
is to be that allowed by the law Of the State Terri
tory where the bank Is situated
,Second-When by the laws Of the State Territory
different rate is limited for banks of issue organized
under the local laws, the rate SO limited is allowed for
the national banks
Taird-where no rate OF interest is fixed by tho
laws OF the State Territory the national banks may
charge at rate not exceeding seven per cent per
mum.
Fourta-such interest may be reserved Or taken in
advance.
| Eitth-Knowingly reserving receiving or charging
"a rate OF interest greater than aforesaid shall be held
and adiudged forfeiture Of the interest which the
note bill or other evidence of debt carries with IT,
which has been agreed to be paid thereon
S1h-lf greater rate has been paid twice the
amount 30 paid be recovered back provided suit
be brought within two years from the time the usurous
transaction occurred.
Sepeah-The purchase discount or sale of bin OF
exchange payable at another place, at not more than
the current rate OF exchange sight drafts il addition
to the interest shall not be considered rs taking or re-
ceiying greater rate OF interest than that permitted
These clauses, examined b. their light seem TO
us too clear to admit Of doubt as to anything which
4 they relate Ihay form system OF regulation. All
the parts are in harmony with each and cover the
entire subject But IL is contended that the phrase "a
rate OF interest greater than aforesaid stands in
the context, has reference only to the preceding
sentence which relates TO banks whore no rate ofiner
est is fixed by law and that hence II leaves the conse
quences of usury, where such Is fixed to be gov
erued wholly by the local law upon the subject This
- 'e S,@eo " NeW iorkl "ouu, IN al such cases,
render The contract nullity, and forfeit the debt
Such the Court Of Appeals held to be the law in this
case and adudged accordingly Neither Of these
can be maintained The collocaton of the terms in
question does not dramatically require such
strpcton. Viewed IN this light the phrase is as
much applicable to both the foregoing clauses as
70 inc next preceding one Tho point to be
sought is the intent of the aw-making power The
offence Of usury under this rs great where
the local law does not as where II does define tho
OF interest The considerations apply in DO h
cases. Why should Congress punish in one class of
cases ana SO Tar as its action IS concerned exempt in
the otherS Why such Discrimination Tho result
would be that in Pennsylvania, where the contract
would be void only to the unlawful excess the
bank would lose nothing but such excess, while in
New York, under a contract precisely the same,
debt would be lost to the bank. This would be
contrary to tho paines principles and Justice
A purpose to produce or permit such of things
ought not to be imputed to Congress- unless the cir
cumsances cogent render that result newt
able. We find nothing within the scope of the sub.
Ject OF that character The second propostion-that
the State law, including its penalties would apply if
the first proposition be sounds equally untenable
II the construction conended for correct tho
State law would have bearing whatever upon the
case. The constitutonaity of tho 1864 is not
questioned. II rests upon the principle as the
act creating the second bank or the United states The
reasoning OF Secretary Hamilton and or this Court in
McCulloch VS. Maryland Wheat 3l6) and Osborne vs.
the Bank of the United States 70 Wheat 70S therefore
applies The national banks organized under the are
instruments designed to be used to aid the government
in the administration OF important branch of the
public service. They means appropriate to that |
end OF the degree OF the necessity which existed for
creating them Congress Is the sole Judge Being such
means, brought into existence for this purpose in
tended 70 be so employed the States exercise no
control over them in any wise Affect their opera
ton except In so far as Congress may proper to
permit Anything beyond this is ian abuse because
1t is the usurpaton Of power which single State
give" Against the national will 'tho States have no
power, by taxation otherwise, to retard, impede
burden in any control the operation Of tho
constitutional laws enacted by Congress to carry into
execution tho powers vested in the general govern
mentn Bank Of the United States VS.. McCuloch
supra Weston and others Charleston e Peters 1861
Brown Maryland az Wheat, 40; Dobbins VS.. Eric
County az Wheat, 4l9l
The power to create carries with It the power 10 pre-
The latter Is corolary from the former Tho
principle announced in the authorities cited is inds
pensabe TO the efficiency Independence, and, indeed
beneficial existence Of the general government
Otherwise it would be liable, in the discharge of s
most important trusts to BIO annoyed and ;hwRrted by
the will or caprice of every State in the Union In.
finite confusion would follow The government would
be reduced TO a pitiable condition OF weakness The
form might remain but the vital essence would have
departed In the complex system of poy which OBJ
tans IN this country the powers OF government may DO
divided into four classes
Those which belong exclusively 10 the States
Those which belong exclusively to the national gov
ernment
Those which may be exercised concurrently and in
dependentiy by both.
And those which may be exercised by the States, but
only with the consent express or implied of Congress-
Whenever the will OF the nation intervcnes exclusively
in this class of the authority the retre5
and lies in allegiance until proper occasion for
ercise shall recur-Gilman Philadelphia Is Wall
7I3) exparte Mcneil 3 Wall, 240 The power of the
States to tax the existing national banks eswthn the
1t must always be borne in mind that the constu-
ton Of the United States and tho laws which shall DO
made in pursuance thereof" 'thc supreme law Of
the landn Constitution article o. md that this law is
as much part OF the law OF each and rs binding
upon It's authorizes and the people It's own local
constitution and laws In any view that be taken
of the thrtieth section the power 10 supplement by
State legislation is conferred neither expressly nor by
implication. There nothing which gives support
such suggestion There was reason why the rate Of
interest should be governed by the law Of the state
where bank situated but there s none why usury
should be visited with the forfeiture OF the entire deb
in State and with penal consequence whatever
in another. This we think would be unreasonable and
contrary TO the manifest intent OF Congress Where
statute prcscrbes OF interest and simply forbids
tho taking OF more, and is contracted for, tho
contract Is good for what might be lawfully taken and
VOID only as 10 excess-Burnnkisel VS.. Wright,
signee, p Wall NOV in press; German VS. Calvert u
Sarg &c, X, 10 Forleitures not favored In the
law. Courts always incline against thcm-Marshall vs.
Vicksburg, Is Walt, 156 When either OF two con-
structions DO given to statute, and Of them
involves y forfeiture the other is be preferred
Eatel 10Th Rule OF construction. Where statute
creates a new offence and denounces the penalty or
gives a right aud declares the remedy, the pun.
shment or the remedy can be only that which the
statute preserbcs-Staiord vs. Ingcrsol 3 Hin, 81;
First National Bank OF Whitehall VS. Lamb, 81 Barb
42o
The hr,leth section is remedial as well as penal, and
Is be literally construed 10 effect the object which
Congress had in view Ia enactng it. tGray VS. Ben
nett Mot 500 The fory-sixth section Of the bank
ing act OF February 25 1868 IL Stat SI9 declared
reserving or taking more than tho interest allowed
should DC held and adiudged forfeiture the debt or
demandp In the act Of 1864 tho forfeiture the debt
is omitted and there Is substituted the forfeiture
OF the interest stipulated for, II IL had only been
served, and the recovery OF twice the where
tho Interest had been actually paid In tho Revised
Statutes Of the United States OF the 22d OF June1Sl4
lO tho provisions Of the Lhirclh section OF the act