The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1893-12-08
OF INTEREST TO BANK OFFICERS.


Topeka, Kan, Dec. 7.-Several months
ago the First National bank of Arkansas
City failed, and was placed in charge or a
receiver appointed by the comptroller oil
the currency. The bank, By its cashier
aud other officers, according to letter
from County Attorney Scott of Cowley
county to Attorney General Little, con-
tinued to receive money up to the time OF
the failure from depositors. knowing that
the concern was in failing circumstances.
| The officials of the bank ten days before
the failure were using every effort with
local banks to obtain money to tide them
over. but kept this fact concealed from The
public.
The question Of prosecuting the officials
of the bank was Submitted to County At
! tOrney Scott. He made an Investigation
and found evidence which he thought was
| sufficient to Convict, but as the bank was
| III the hands of IA receiver, he was III DOUBT
| as to whether or not lie could prosecute
! The matter was submitted to Attorney
| General Little, who has rendered an opin-
| ion which will no doubt be regarded AS
| important by lawyers, bankers and others
| Interested The opinion is contained IN a
letter addressed to County Attorney Scott.
| The attorney general snys:
II have been considering this question
for some time, reviewing authorize. and
the United States statutes and United
States decisions. I have before me the
Revised Statutes of the United States,
second edition, 1878 aud section 520J reads
as follows:
''Every president, director, cashier,
teller, clerk Or agent OF any association
who em mbeZzles. abstracts or willfuliy mis-
applies any of the moneys, funds or credits
nf ka x.-i,h ha,
thority from the directors, issues, or puts
in circulation any of the notes of the
association, or VINO, without such au-
thority, issues or puts forth any certificate
OF deposit, draws any order or bill of eX-
Change; makes any acceptance; signs any
note, bond. draft, bill Of exchange.
mortgage, judgment, decree: or who makes
any false entry III any book, report or
statement OF the association with intent
in either case TO injure or defraud the
association or any other company, body
polite or corporate, or any individual
person, or to deceive any officer of the
association or any agent appointed to eX-
anime the affairs OF any such associ alton,
and every person who with intent aids or
abe;s any officer, clerk or agent IL any
violation Of this section shall be deemed
guilty Of misdemeanOr and shall be i'm.
prisoued not less than five years nor more
than ten Years.
This section is the one which prescribes
the punishment for the violation of
chapter three of the act regulating the
banking business which was passed June
3. 1864 You will readily perceive by an
examination OF the section that it does not
provide for the punishment Of an officer
who receives money iuto the bank when
the officers thereof know that IL is in fall
ing circumstances. There seems to be no
provision in the United States statute for
the protection OF that large class of de-
positors whom the law of Kansas was
enacted to protect. Hence you will
see that under this section
national bank may receive the money of
depositors when it knows that it is in
failing circumstances and is insolvent and
must shortly close Its doors. thereby caus-
lng loss to its depositors. This section
provides no punishment for that class of
cases. If the officers of a national bank
receive deposits when they know the bank
is In failing condition, unless such officers
are amenable to the state criminal stat ute,
there Is no punishment. Now, l think it
is well settled by the authorities under
this very section OF the United States stat
ute that where the United States statute
does not prescribe II punishment for the
things which are made criminal by state
statute that the state statute Is applicable
and the officers of a national bank may be
Il call your attention to 81 Massachu-
setts reports, on page 80, n pact Of the syl-
labi of which reads rs follows: The of
tense of fraudulent conversion by an Off
Ger or person in the employ ment Of a bauk
incorporated under the laws of the United
States and located in Massachusetts of
property of individuals deposited in such
bank is not punishable under any existing
law of the United States, and the courts
m Vvnal l1 lsIi iHti
thereof, under the general statutes. TIE
court, in the body of the opinion, says:
An examination of the United States
statute, leads us to the conclusion that the
otfense Charged in this Indictment has not
been made punishable by any act Of con-
gress. The euactments cited on behalf of
The defendant punish the embezzlement
OF the property of national banks. but not
OF the property of individuals deposited
with and in the custody of such banks
Il think the court very clearly holds in |
this case that stale courts have jurlsdic- |
ton to punish the officers of national |
banks for the violation of state statute,
when by act of congress there Is 10 pro- |
vision of the same.
'In 1l6 Massachusetts page l, the court |
says: Making The embezzlement of the
funds Of n national bank by one of its Off |
GERS misdemeanor does not interfere |
with the jurisdiction of the state courts |
over larcenies committed upon the prop
erty OF n national bank by one of its Off |
GERS. The fact that a person who has |
stolen property belonging to national |
bank is an officer of the bank aud subject |
to punishment for embeZzlement |
under the United States statute |
does not relieve him from his liability to |
punishment by the same act as larceny |
at common law or under the statutes Of |
the state
II call your attention particularly to |
volume 13, Mort heastern Reports, in "A |
case decided 10y the supreme court of Illi- |
nois, November II, 1881. Hoke VS.. people. |
La this case the supreme court clearly |
holds that the state court has jurisdiction |
TO punish, and is not in conflict with the |
provisions of the United States statutes.
Ia "a Connecticut, page 2S0. the court |
holds that w here an act Of congress
creating corporation provides a pun sh-
ment 10 be iaiictei upon any officer Oh he |
corporation who embczlles its property.
IL Is not competent tor the state legisa-
ture to MAKE the same act an ohense /
against the laws OF the state; but where
An act of congress creates corporation |
within the state aud authorizes il in gen
eral terms TO purs ae tae business OF bank
ing, 1t Is competent for state legislature |
TO protect the bank and those VINO deal
with it in that business, by suitable penal
enactmentS. Such au enaci ment is not !
pred .cated on and has no relation to any
law OF congress or oHtnse created |
thereby
"ln 9i Pennsylvania, the court holds
that teller OF national bank may be |
convicted in a state court upon an indict- !
ment charging him with fraudulently |
making talse entries, reports and State
ments of the bank with tue intent TO in
Jure and defFaua said bank; the offeus,
thus charged wa, forgery at common law.
You viii also See that in 10l Masss-
chusetts the court holds that where con-i
Crrss has pStahlf shed "a co-porarior ,D,f