Evening star., 1924-01-28
BRANCHES REFUSED
TONAT|0NAl. BANKS
BY SUPREME COURT
Right of States to Prohibit
Establishment of Outside
Offices Upheld.
THREE JUSTICES FILE
DISSENTING OPINION
Moves Proposed to Press for Ap-
plication of Ruling in
Washington.

The right OF a state to prevent
national banks within it's borders
Srom establishing branch banking
Establishments was upheld today by
the Supreme Court. which at the same
time ruled that the same prohibition
vas contained in the federal
Statutes themselves.
The courts decision, which settles
g controversy that has shaken the
banking world for many months, was
handed down in the case of the First
National Bank of st. Louis. The
bank had demurred from a Missouri
state law prohibiting it from estab-
fishing branches and, losing in the
lower federal court. had appealed.
The decision of the lower court was
affirmed.
Eighteen states had joined Missouri
i'll maintaining the right of the state
governments to prevent national
banks from indulging in branch bank
Ing. The court not only upheld that
right, but held that the st. Louis
bank case had been properly brought.
and that the Missouri law was not in
conflict with federal statutes.
Three Judges Dissent.
Justice Sutherland delivered the
opinion. from which Chief Justice
Taft and Justices Van Devanter and
Butler dissented.
National banks had operated for
more than half century without
branches, Justice Sutherland said,
without any apparent detriment to
their efficiency.
Justice Van Devanter delivered a
dissenting 0niDiIr which he said
Chief Justice TAFT and Justice Butler
coined.
There were only two questions to be
considered Justice Sutherland said.
The first was whether the state
statute was valid as applied to ma
tional banks. This the court an
Swered in the affirmative.
The second question was whether
Ihe proceedings to call national
banks into account as followed in
the present case were proper and
could be maintained. The courts
answer was that the proceedings had
been properly brought, and that the
decision OF the Missouri state courts
was affirmed.
Position of State.
What the state is seeking to do is
10 vindicate and enforce it's own
laws" said Justice Sutherland. Ma
Iional banks are brought into exist
snce under federal Legislation, are
iastrumentalities of the federal gov
ernment and are necessarily subject
10 the paramount authority OF the
United States.
Nevertheless, national banks are
subject to the laws of a state in
respect of their affairs unless such
laws interfere with the purposes of
their creation. ten1 jr1nair or
story their efficiency as federal
agencies or conflict with the para
mount law of the United States"
Justice Sutherland pointed out that
the federal banking laws required
banks to do business at "an office
or banking house" specified in its
charter
strictly, the latter provision. en-
ploying as 1t does the article AN
TO qualify words in the singular num-
Der, would confine the association to
one office or banking house." said
Justice Sutherland. we are asked
however, to construe 1t other Use
But obviously this rule is not one to
be applied except where it is neces-
sary to carry out the evident intent
of the statute. If it had been
INTENDED to allow the establishment
by an association of not one bank
only, but, in addition, as many
branch banks as they saw it.
Ct Is remarkable, to say the least
that there should have been no pro
vision for adjusting the capital to
the latter contingency or for deter
mining how or under what circum-
stances such branch banks might be
established or for regulating them"
Special Acts Required.
Justice Sutherland pointed out that
special Legislation was required from
Congress to authorize branch national
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