Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1911-01-04
cFrom a staff correspondent.)

unea
(From a Staff Correspondent
WASHINGTON, Jan. a-Cspecial Tele- !
gram.) .)-Justce Holmes in the supreme
court today. rendered decision In the |
so-called bank guaranty cases from Ne
braska, Oklahoma and Kansas. wherein
the constitutionalty Of the legislative acts
OF these states was questioned. The laws 1
are sustained by the United States su-
preme court
In his opinion in the case Of Ashton c.
shallenberger govtrnor OF Nebraska, !
against the First National bank OF Hol |
stein, Neb.. on appeal from the circuit
court Of the United States for the district
OF Nebraska, Justice Holmes reverses the
decision OF the circuit court, which was
against the state.
The Nebraska suit was test case in
which many banks Of Nebraska we're in
terested, hoping to prevent the banking
board OF Nebraska from carrying out and
enforcing an act similar to the Oklahoma
statue. II forblds banking except by a
corporation formed under the act and
provides for a guaranty fund. The circuit
court held the statue unconstitutional and
issred an Injunction against its enforce
ment.
All Three Laws Upheld.
The United States supreme court also
today affirmed the judgment OF the Okla
hOma supreme court in the Noble State
bank case upholding the oonsututionality
OF the state bank guaranty law.
The Kansas law was tested In q suit
brought by the AsBaria State bank OF As
sariA, the State Bank OF Axteil. and other
banks. A suit in equity was started to
prevent the enforcement Of the law pro-
vidinss. forD = bank saeDcssiora' guaraAty
fund Th6 circuit court held the Kansas
law unconstltusional. but dismissed the
bill Of complaint on the ground that the
appellants did not show that their rights
had been infringed. The ground OF com
plant was that the law imposed certain
conditions upon the sharing OF benefits
and burdens OF contributors TO the guar
anty fund; that the appellants could or
would not contribute and that unless they
did the effect Of the law would be to de-
pirvo them OF their business.
The Nebraska case was decided on identi-
caliy the same grounds as the Oklahoma
case, and similarly the Kansas law. though
this contains certain minor differences.
The most important OF these is that con-
tribuhons are not absolutely required
Police Power Basis of Decision.
1T may be said In a general way that
the police power extends to all great pub
uo needs" Justice Holmes stated. 1T will
serve as a datum on this side that in our
opinion the statue before us is we'll within
a states constitutional power. while the
use OF public credit on large scale to
help individuals in business has been held
TO be beyond the line.
The question that we have decided is
not much helped by prOpounding the
further one whether the right to engage
IN banking is or can be made a franchise.
But as the latter question has some bear
ing on the former and as 1t will have to
be considered in following cases, II not
here, we win dispose of IL now. 1t is not
answered by citing authorities for ex-
istence OF q right At common law. There
are many things a man might do at
common law that state may forbid He
might smbszEle until the statute cut down
mis- liberty. We cannot say that the public
interests to which we have adverted and
Others, are not sufficient to warrant the
state taking the whole business OF bank
ing under its control On the contrary,
We are Of the opinion that Il may so on
from regulation TO prohibition, except upon
such conditions as 1t may prescribe.
Tn short when the Oklahoma legislature
declares By implication that free banking
is public danger and that Incorporation
inspection ana the above described CO.
operation are necessary safeguards this
court certainly cannot say that It is wrong
Some further details might be mentioned
but we deem them unnecessary here. OF
eours objections under the state consutu-
tian are not open here"
Justice Holmes said the main objection
60 the laws was that the assessment OF IN,
banks OF the state In order 10 create funds
70 guarantee deposits in other banks within
the state took private property OF one bani
for the private use OF another withou
compensation. Justice Holmes admittec
that there might be a taking of privat,
property without return to pay debts OF
rival failing IN business, but he said Their
were more powerful considerations on IN
other side OF the question,
"In the first place he said. 1T Is estab
mshed by cases that an ulterior public ad
vantage may justify a comparatively in
significant taking OF private property 70
what IN its immediate purpose is a privat
use.
1T would seem that there may be othe
cases besides the everyday one OF taxa
ton In which the share OF each party d
tho benefit OF a scheme OF mutual protec
tion Is sufnclent compensation for the COZ
relative burden that it Is compelled 10 a.
sumo, AZ least II We have case With
the reasonable exercise OF the police powe
a. abov explained no more need be said.
"omaha banks win not be affected b
the law" said W H E2cholE. vice pres
dent Of the Omaha National bank. "Th
CONTINUED on Fourth PaEeD