The Washington herald., 1908-08-02

] Ni7A''laN "a Allt OhAtiIAflUd SAdtAhEs AAlE
Secretary of the Treasury would direct
/ the Comptroller to bring suit 10 forfeit
the charter or a certain national bank in
! Oklahoma. in case 1t should persist in
/ accepting the provisions Of the statute in
question
BOnEParte'S Opinion.
! In<his opinion the Attorney General says
/ Of the Oklahoma statute
| It's meaning seems TO be sufficiently
/ clear. namely. that. II a national bank
( in oklahoma sees fl 70 submit itself
voluntarily 70 the terms OF the State
/ banking law. in so fsr as the same may
| be deemed necessary in its case 10 secure
I harmony with the purpose OF the said
| act by the board and commissioner. its
J deposits viii Be guaranteed by the board
out OF the fund provided by assessment
| as above explained. IL being OF course
( indispensable for the purpose indicated
I that such hank should contribute its quota
toward the maintenance OF The fund. and.
I Tor this purpose should submit itself 70
/ assessments TO be levied against its CAPT
I tai by the commissioner FOR the purposes
{ Of meeting claims OF Gepositors In State
banks against those institutions. and of
/ depositors IN other national banks which
| may likewise accept the terms Of the act
I organizing them
/ 'In the papers transmitted 70 ne IN
/ connection with your question and in the
! memoranda which I have caused TO be
/ prepared for assistance in passing upon
I the questions Involved. there IS some
| discussion IS 10 whether this can be con
I sidered an insurance OF the banks de-
Z posits. and. as such. a legitimate. II some
/ what novel. feature in the c0EdIcr Of its
! business 50 far as 7 am aware, there
[ IS no provision Of law or rule Of public
[ policy forbidding a depositor in a na-
tioual bank from obtaining insurance on
I the insolvency OF the bank. and the con
! seqUent payment of his debt IN accord
I ance with is legal Import; but the busi-
ness or insurlug deposits Is a wholly sep
[ arate business from that Of banking. and
Z a corporation organized for the latter
[ business would have no greater right 10
ernbarrass its funds and risk its credit IN
I the former than e would have 10 engage
I IN If. insurance or Sre Insurance. or cas-
T ualty or marine Insurance
4 The Attorney General finds nc provf-
sion Of the national banking law author
I ling the stockholders OF national bank
Z 20 embark IN the business Of insuring
( their fepositors against loss.
"A business Of this nature he says
T would be essentially foreign 10 the Ie-
gitimate functions OF a national bank as
i an instrument OF government
He adds.
7 do not however. consider an apulf-
/ cation under this law by national bank
as IN any proper sense. an insurance Of
I its deposits This may be an incidental
! consequence Of such action. but the ac-
I tion Involves essentially q guaranty 10
[ the depositors Of all State banks in Okla
I horna. and other national banks in that
state which may accept the terms OF the
Z law that their respective deposits shall
/ be paid IN full The satisfaction Of this
guaranty may at least fa theory. involve
[ the complete exhaustion OF the assets OF
I the bank entering into it. for, although.
I IN the first instance. the assessment is TO
amount to only I per cent OF the aver
/ age deposits during the preceding year.
Z yet a special assessment may he and
must be. made by the board in case there
Is any deficiency IN the sum provided
These assessments might conceivabIy ab-
soro the entire sum Of the aggregate as
/ sets out Of which they must be paid
Terms OF the Contract.
In conclusion AIr. Bonapare saws.
I have overlooked the fact that BY
the terms Of the proposed contract be-
tween the hank in question and the State
or its banking board the said bank agrees
70 do nothing which shan be in conflict
with the Federal law; but this provision
is not relevant, for the entire contract
is ultra wires for a national bank. and
prohibited blythe necessary fntendment
OF the statute I hold that such is the
fact with respect 10 the contract proposed
in this case; that 1t is Illegal for the
officers Of any national hank 70 enter into
such an agreement as Is contemplated by
section Of the Oklahoma statute. and
that persistent and wtliful action 10 this
effect on the part Of any such bank
would be just cause for the forfeiture
of its charter"
The opinion Is regarded as having an
extremely important deterrent effect on
the movement to obtain Federal authority
for guaranty Of the deposits Of ua-
tional banks The Democratic national
platform advocates a law TO that effect