The citizen-Republican. (Scotland, Bon Homme County, S.D.) 1???-19??, 1909-10-21
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 a decree entered in federal court
Saturday afternoon by Judge T. c..
Munger, Circuit Judge Vandervanter
concurring.
The syllabus touches upon two
points: G) That the enforced guar
anty Is a violation of section l of the
14th amendment to the federal ON
stitution which "a that property shall
not be taken without due pocess of
law, and (2) 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 number of cases
wherein it is stated that the right to
do business is a 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 q 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
taking of another's property,
beyond the powers of regulation be-
longing to the state, and that the state
may not, through taxation, bear down
upon n man 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 en-
tire fabric must fall through his de-
feet. The court points out that it does
not discuss the question of whether in
c~orporated 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-
tiOn.
The opinion apparently strikes at the
very heart of al enforced guaranty. It
also wipes out entirely the question of
the right Of the state to enforce all
banking institutions to incorporate.
The way Is left open for only a vol
untary guaranty act. The case will be
appealed to the supreme court Of the
United States.
Governor Not Surprised.
Governor Shallenberger in an inter-
view on the decision says:
The decision is not wholly a sur
prise. 1t is exactly what those who
FOR partisan or selfish are OPP
posed to any effective guaranty of de-
posits law desired. 1t goes to the very
heart OF the question and denie the
right OF the state to require the banks.
which exist by virtue of their charters,
to pay q certain tax to create a guar
anty fund or to prescribe a form and
under which h 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. T am
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 nullifca-
ton by the courts was to intensity the
desire and determination that our state
supreme court shall not be longer con-
astituted wholly of members of one POI
Iitical perry. 1t might be noted in
passing that h distinguished democrat
OF this state who as made q federal
Judge by q revered republican presi-
dent, was not called into Judgment
upon this case.
THE overthrow OF legislative enact
ments bv the interference OF the ex-
ecutive. by the use OF patronage or the
veto power, n the notification of
laws by our courts, has steadily tended
to degrade the power of the legislative
branch OF U government and to make
1t a thing for politicians n lobbyists
to play with,
The governor says that in such a
state supreme court should have final
jurisdiction with In appeal only di-
rectly to the United States supreme
court.