Daily capital journal. (Salem, Oregon) 1903-1919, 1915-09-07
Argues Congress Had No
Right to Give Trust Go.
Powers to National Banks

POWERS 10 Nall0nal bank
Seattle, Wash, Sept. THAT con
gress trespassed constitutional limita
/ tions in one section of the Federal Re
serve Board act and that the reserv,
board is going beyond its rights in pro
ceeding under that section was the dee
laration of Henry M. Campbell, of De
troit, to the American Bankers asso
citation today. The section he referred
to is that permitting the board to con
fer trustee powers on national banks
1t was the principal feature of the op
ening day of the convention, attended
by hundreds of bankers, though dis
cussion Of the relations between the
railroads and the people, led by Presi
dent William Sproule of the Southern
Pacific on the one hand and Rev. John
W. Hill, of Seattle, on the other di
vided interest with it.
Congress did the damage complained
of, Campbell said, in four-iine para.
graph which said the reserve board
should have power "To grant by special
permit to national bank applying there,
for, where not in contravention of
state or local law, the right to act
as trustee, executor, administrator or
registrar of stocks and bonds, under
such rules and regulations as the said
board may prescribe
" From the beginning of our govern
ment," he said, "fiduciary trusts have
been defined and regulated by local
law; the administration of estates has
belonged exclusively to the states
where the property Of the deceased is
located, and the subjects upon which
the inhabitants of a state may con
tract have been prescribed by state
authority. The state laws pertaining to
these matters fill volumes of our state
statutes. They vary in the several
states according to local requirements
and are the result Of years of effort
on the part of the representatives. of
the people affected by them. BY virtue
of this brief paragraph of four lines, if
valid, all these statutes may be set at
nought.
In order to arrive at solution of
this problem, three questions must be
considered:
" First-Has Congress itself author.
ity. under the federal constitution, to
confer upon national banks the right to
exercise the powers stated in section II
(k)2
"Second-If it can lawfully do so
itself, can it delegate such authority to
the federal reserve board7
"Third-If neither the federal re-
serve board nor congress itself can con.
fer such powers upon national banks.
have the states, Or any of them con
sented to the exercise of them. and if
so, will consent on the part of the state
be effective7"
Answering his own first question,
Campbell said there was nothing to be
found in the constitution giving con.
gress authority to create corporations
FOR any purpose, though it has the i'm
phed authority to create them as nm.
instruments for carving into
erect the powers of the government.
- No one viii contend" he said
that the right to act as trustee. exec.
utor, administrator or registrar of
stocks and bonds is in any sense neces.
sary to the administration of tbe af.
fairs of the federal government Meth
ar is such right in an integral or essen.
'lal part OF the business carried on by
national banks. 1t is not banking
'.jrV
Therefore the section cannot he sps.
tanned upon any theory of implied pow.
He disposed of his own second oues.
tion by declaring congress conld no, |
leIegate authority to the reserve board |
TO create a corporation or add to cor /
1oratlon powers, because such an act
Involves legislative discretion and can
'niy be exercised by the legislature.
AS FOR the various states giving con.
third question-he declared;
TO do so would, in effect he to
lermlt the state legislature to amend
ne FEDERAL constitution. In other words
rs impossible to give effect to the
ec'l0n without violating the constitu.
'onal rights of the states. Two SOW.
reign powers cannot exercise ev.
iusl'e authority over the same object
my more thaa two soil bodies can Z
ime. S"''e
Inc answer to the third Question 4
must De that no state has consented ~
ne exercise of the powers specified in ,
ne section upon the terms and condi. ,
IONS there stated, and that consent rr
he part of the state, even if granted
would be Intellectual. We
Before the the of section II c,r
'e carried out, an amendment fo tbo
s eaeral constitution would be rcqnired !
l..'. uurt which the states surrender the.r
authority over many Of tbeir
oIal affairs, and permit congress 70
es,ghate 10y whom and in what monror
uch affairs shall be administered Sncb
amendment would not accord with .