The San Francisco call., 1909-08-21
STATE CONTROL OF
NATIONAL BANKS
Superintendent Anderson Issues
Notice That They Must
Report to Him
Only the Savings Departments
Are to Be Under His Direct :.
Supervision

Pursuant to the provisions of the
state bank act. superintendent of
Banks Alden Anderson yesterday ad
dressed a circular letter TO the national
banks of the state quoting an opinion
from an attorney to the effect that the
superintendent of banks could bring
all national institutions conducting or
advertising as savings banks or having
savings departments under the pro-
visions of the state banking depart
ment.
NATIONAL BANK ACT
The opinion is as follows:
The question you ask involves the all important
question of the relation between state and fed
eral government. well a construction Of
the national bank act National banks are in
stunents designed to aid the federal govern
ment in an important branch OF public service.
and beyond the point Of aiding the federal gov
eminent In the manner and by the exercise Of
the functions prescribed in the act congress has
not sought to legislate. and has not limited the
states from legtsating upon affairs bearing on
the business OF banking, and which affairs can
be best administered upon by the states by THEN
sovereign capacity
While Congress, in the exercise of an undis-
puted constitutional power TO provide necessary
currency kor the whole country, may secure the
benent of it to the whole people by appropriate
legislation in the creation OF national banks yet
those banks the less private corpora
tions. organized under general law Of congress
by individual stock holders with their own capl-
tai Tor private gain and managed by officers,
agents ana employees of their own selection, and
tney constitute no part or branch Of the federal
government. and whatever public benefit they
contribute to the whole country In return for
those grants and privileges conferred upon them
by congress that benefit Is OF a general nature
arising from them by their relations with the
people through individual citizens, and they do
not act as direct representative of a state
body politic in exercising any function.
PRIVATE IN THEIR NATURE
Being private in their nature, and the profits
or losses resulting from their business being not
shared or participated In by the government, the
measure OF their public benefit and the scope of
their fundamentally in aid of the federal gov
ernment must fnd its authority in the national
bank act, and beyond, the grant in that act ma
tional banks must obtain from state laws any
privileges enjoyed which are not within the ma
fonal bank act.
Therefore II any law enacted by the state shall
prohibit a national bank from transacting a
ings bank business without first complying with
the law Of the state such prohibition in no wise
Affects these banks instruments OF the federal
government. since every function that they per-
FORM that In any way relates TO public service
TO the federal government be fully per-
formed without engaging In the business OF
savings bank. and 1t is manifest that the state
can require OF any national bank. when IL gets
beyond the purposes for which congress provides
that they may be instituted and engages in a
business that the state in it's sovereign capacity
mas deemed necessary to regulate, that they
must submit to this state regulation and be sub
ject to it's control.
STATE HAS CONTROL
l. therefore, OF the opinion as the COM
mercial world recognizes the distinction between
commercial bank and a savings bank, and as
that same distinction In recognized legfslatively
and 1udicisiy, that congress had that distinction
In mind at the time of the passage of the law
providing for the creation of na tional banks and
By the omission TO include In the scope of power
granted to national banks any provision relating
TO savings bank business, and its omission SO to
do was Intentional leaving the bank subject to
state control II it gets beyond the limits granted
to 1t by the ate OF congress. and that section 40
OF the bank act OF Cslifornia, as approved March
1, 1909, applies with equal force to a national
bank AZ IL does to a bank organized under the
laws Of the state Of California