The Montgomery advertiser., 1908-08-04
HITS BANK GUARANTEED
 WOULD FORFEIT CHATTER.

Attorney General Says National Banks
 Can't Avail Themselves of Okin-
 homa Law.
 washington Special.
 Guarantee of the dopists of national banks under the state law of Olkia- homa. which has been frequently cited as an example of what the several States should do in this regard, Is held today by the Attorney General to be just cause for the forfeiture of their charters. The decision is based upon the precept that national banks are inHtruments of the government of the United States: that Congress cre- ates them by virtue of It's general powers to provide for such instru- f1ients. and that no State can. by any law. interfere with their manarement or operation in so far as these arc determined expressly or by implica- tion in the laws of the United States.
 In the opinion the Attorney General says:
 "rhe statute of Oklahoma, to which you call my attention, creates a State banking board, composed of certain designated State officers. and requires the saids board to levy against the capital stock an assessment of one per cent of the banks daily average de- posits with certain deductions upon each and every bank organized and existing under the laws of this State This assessment is to constitute what is designated as a depositors' guar anty fund. levied against the capital stock of the banks approximately to the amount of their deposits. so as always to maintain the fund at the designated amount.
 Not for National Banks.
 This fund Is to be used in paying the deposftors of any bank included within the terms of the statute any deficiency there may be In the amount to be received by them from the assets of such bank in the event of It's fail- ure. By Section { 1t is provided that any national bank In the said State, with the approval of the bank com missioner thereto. may voluntarily avail it's depositors of the protection of the deposltors' guaranty fund by application to the State banking board in writing.
 aso far as am aware, there Is no provision of law or rule of public forbidding a depositor in a national bank from obtaining Insurance on the soivency of the bank and the conse. duent payment Of his debt in accord ance with it's legal import; but the business of insuring deposits is a who'll " separate DuelnSSA rom that or banking and a corporation organized for the latter business would have no greater right to efnbarrass its funds and risk its credit in the former than it would have to engage in life insn- rance Or fire insurance, or casualty or marine insurancc4
 Not Warranted By Law.
 Moreover, 1t is to be observed that the bank and not the depositor pays the premium, or the equivalent of premium, # the system of guaranty established by the Oklahoma law Is to be regarded in the light of an in- surance, and upon this assumption therefore the question would be whether the stockholders of national bank, constituting as they do the cor. poration. are authorized to embark In the business of insuring their deposi- tors against loss through the meth ods set forth in this State statute in con- sideration presumably of the increased amount of deposits which they would thus obtain. I find no provision of the national banking law authorizing any such action on their part and. in my opinion, business of this nature would be essentially foreign to the le- gitimate functions of a national bank as an instrument of government"