Kingsbury County independent. (DeSmet, Kingsbury County, S.D.) 1894-1929, 1909-10-29
GUARANTY STATUTE
ANNULLED BY JUDGE
OF FEDERAL COURT
Holds the Law Invalid and
Banking Board Is Restrained
From Enforcement.

Lincoln, Neb., Oct. 20.-The Nebras-
ka state banking board is permanently
enjoined from enforcing the bank guar
anty act passed by the last legislature
by q decree entered in federal court
Saturday afternoon by Judge t. c.
Munger, Circuit Judge Vandervanter
concurring.
The syllabus touches upon two
points: "a That the enforced guar
anty is q violation OF section ! Of the
14th amendment to the federal con-
stitution which says that property shall
not be taken without due pocess OF
law. and CD that the confinement of
banking to corporate bodies, a void
provision, was an inducement to the
passage of the act, and that the en-
tire act is therefore invalid.
The judge cites a umbe of cases
wherein it is stated that the right to
do business is q personal and inherited
right and not a franchise. 1t is stated
that banking is a business not unlike
that OF the grocer or dry goods mer-
chant; that the failure of a bank af-
fects a community no differently than
the failure of any business institution
except in degree only. 1t is held that
an enforced guaranty of deposits is an
unlawful taking OF another's property,
beyond the powers &c regulation be-
longing to he state, and hat the state
may not, through taxation, bear down
upon n mar to make another rich.
Hits Vital Point.
The attempt to force all bankers to
incorporate their business is void, says
the court, and as it was an induce
ment to the passage of the act the n
tire fabric must fall through this de-
feet. The court points out hat 1t does
not discuss the question Of whether in
corporated banks may, without refer
ence to individual bankers, be COM
PEELED to submit to some sort OF guar
anty.
The court says that the guaranty
Idea is not analogous to licenses and
other fees imposed by the state, be-
cause such powers are exercised under
the general idea that the state is
merely collecting the cost OF inspec-
ton.
The opinion apparently strikes at the
very heart of an enforced guaranty. 1t
also wipes out entirely the question of
he right Of the state to enforce all
banking institutions to incorporate.
The way is left open for only a vol
untary guaranty act. The a will be
appealed to the supreme court of the
United States.
Governor Not Surprised.
Governor Shallenberger in an inter
view on the decision says:
1.-THE decision is not wholly a sur
prise. 1t is exactly what those who
for partisan or selfish reasons are OPP
posed TO any effective guaranty of de-
posits law desired. 1t goes to the very
heart Of the question and denies the
right of the state to require the banks,
which exist by virtue OF their charters,
TO pay a certain tax to create q guar
anty fund or to prescribe a form and
under which the banking bust
ness shall be conducted. 1t appears to
leave banking no more OF a matter for
public legislation, or limitation, than
the grocery or butcher business.
THE law which has been set aside
by the decree of the court was fraught
with great benefit TO the people. / am
sure that the people desired the legis-
'lation n were anxious to see 1t put
into actual practice.
Degrades Legislative Power.
zone OF the results of the nullifica-
ton by the courts was to intensity the
desire and determination that our state
supreme court shall not be longer con-
stituted wholly of members of one po-
litical party. 1t might be noted in
passing that the distinguished democrat
of this state who as made a federal
Judge by a revered republican presi-
dent, vas not called into judgment
upon this case.
1.-THE overthrow of legislative enact
ments by the interference of the ex-
ecutive, by the use Of patronage or the
veto power, and the notification of
laws by our courts, has steadily tended
to degrade the mower of the Legislative
branch Of our government and to make
it a thing for politicians and lobbyists
to play with"
The governor says that in such q
case as the one under discussion the
state supreme court should have final
jurisdiction with an appeal only d.
rectly to the United States supreme
court.