The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1915-11-09
INJUNCTION GRANTED
BANK EXAMINER RESTRAINED
FOR ENFORCING HIS ORDER
ON STATE BANK DEPOSITS.

Sioux Falls, Nov. 9.-Before leav-
Ing for Salem Judge Jones announced
his decision in the state bank deposit
injunction cases. He granted the in
functions as prayed for by the four
national banks of Sioux Falls, re-
straining j. l.. Wingfield, the public
examiner, from enforcing his ruling
requiring the state banks throughout
the state to deposit so per cent of
their reserve with state banks in the
cities designated as reserve cities.
This decision of Judge Jones ends the
cases so far as the circuit court is
concerned, and unless Judge Jones is
reversed by the supreme court, the
public examiner is left without power
TO force the state banks to make their
reserve deposits in other state banks.
On August Is, 1915, j. l.. Wing
field, the state bank examiner, issued
an order requiring that all state
banks, from and after November Is,
1915, keep on deposit within the
state of South Dakota in banks or
ganized under and by virtue of the
laws OF the state of South Dakota, a
sum of money equal TO so per cen of
their legal reserve" The order also
designated Sioux Falls, Aberdeen.
Mitchell, Watertown. Huron, Pierre,
Rapid City. Brookings and Yankton
as reserve cities. The practical eff
feet of the order was to require the
state banks in the smaller cities
throughout the state to withdraw
their deposits from the national
banks situated within and without
the state OF South Dakota and to keep
their reserve in about a dozen state
banks located In the designated re-
serve cities.
This order was approved by Gov.
Byrne and Attorney General Cald-
well.
Against the order the banks of the
state. both national and state, made
a most vigorous protest and a large
delegation of the most prominent
bankers of the state went to Pierre
to intereede with the governor and
obtain a reversal or modification of
the order. The governor. however,
refused to interfere.
The effect of the order, if put into
effect, would have been so reaching
and so disastrous to the interests of
the state banks in the smaller cities
that the bankers, as a last resort, de-
termined to appeal to the courts.
Four suits were instituted in the Min
nehaha county circuit court before
Judge j. w. Jones by the Minnehaha
National. the Security National, the
Sioux Falls National and the Sean
dinavian-American National banks of
Sioux Falls, praying for injunctions
to restrain the public examiner from
putting the order into effect requir-
ing the state banks to keep so per
cent of their reserve deposit with
other state banks in the designated
reserve cities. Motions for temporary
injunctions were made and these mo-
tons were argued before Judge Jones
on October 20. Upon the part of the
banks three reasons were argued why
the order should be enjoined; first,
that the state bank law is unconstitu-
tional, as it attempts to delegate to
the public examiner authority which
the legislature itself must exercise; ;
second, that the order of the public
examiner is an abuse of the discre-
tion conferred upon him by the bank
ing law, and constitutes a class dis
elimination between the state and ma
tional banks, and third, that in max
ing the order the public examiner ex
ceeded any authority conferred upon
him by the banking law.
In his decision, Judge Jones simply
grants the injunctions prayed for by
the banks, but does not specify the
grounds upon which they are granted.
Counsel for the public examiner
announce that they will appeal at
once to the supreme court from the
decision of Judge Jones. If appeals
be taken, the cases will come up in
their regular order at the April term
of the supreme court, and will prob
ably be decided some time next sum-
mer. In the meantime. the injunc-