Evening star., 1924-01-28
BRANCHES REFUSED
TO NATIONAL BANKS
BY SUPREME COURT

BY SUPREME COURT
Continued from First Page.)
banks at the Chicago and st. Louis
expositions and also that government
agencies had adopted similar policies,
with substantial uniformity" The
Department of Justices opinion May
II, 1911, was referred to in this con-
nection.
To the contention that branch
banks were incidental necessities of
banking, Justice Sutherland said:
THE mere multiplication of places
where the powers of a bank may be
exercised is not, in our opinion,
necessary incident of a banking busi-
ness. 1t is wholly illogical to say
that power which by fair construc-
tion of the statutes is found to be
denied nevertheless exists as an in
cidental power.
Clearly the state statute, by pro-
hibiting branches, does not Illustrate
the purpose for which the bank was
created or interfere with the dis
charge of its duties to the govern
nent or impair its efficiency as a
federal agency.
Existed Half Century.
National banking associations have
gone on for more than half CEN
theory of an absence of authority to
establish them.
If the non-existence CT such
branches or the absence of power to
create them has operated or is cal
culated to operate to the detriment
of the government, or In such man
ner as to inte rfere with the efficiency
of such associations as federal agen-
cieS. or to Illustrate their purposes.
il is inconCeivable that the fact would
not long since have been discovered
and steps taken by Congress to
remedy the omission.
1.-The state statute as applied TO
national banks is. therefore. svalid
land the corrollary that 1t is obliga-
tory and enforceable necessarily re-
lsults. unless some controlling reason
forbids; and since the sanction be-
ihind ii is that of the state and not
that of the national government the
power OF enforcement must rest with
the former and not with the latter"
Justice Sutherland added that the
state was neither seeking to en-
force q law of the United States nor
iendeavorinG to call the bank to ac
!eount for an act in excess OF its
charter powers"
| the dissenting justices thought that
| national banks were not subject to
/ state laws in matters relating to the
| corporate powers of such banks. The
! control of states over national banks.
! he said, was confined exclusively to
! the daily obligations Of the national
! hanks such as receipt of deposits and
payment Of checks.
! Missouri had no authority 20 have
! acted. he said but that only the
! I-nited states could proceed in the
| courts in such actions against the
] national banks.
| ERert in Capital.
IYtc q T.
! land will not in an% way affect the
/ local banking situation. il was de.
! clarcd at the offices OF controller oil
! the currency. ,,
, J-nliko states. where banks are
! GOVERNED by state banking laws, the
| District banking situation is super
! ,.icad by the controller of the cur
r,.rcr. authority for this supervision
J heinz vested in him through the
| MiiIspaugh bill, passed about eighteen
! morths ago. He. therefore. can. at
; his discretion, allow or refuse per-
mission f. operate branches at will.
Branch banking opponents IN
Washington however. declared this
: morning that IL local branches are
| allowed to remain. steps Will be
! taken leading to the annulment OF
/ former Controller Crissinger's acts in
: establishing these branches. on the
: ground that they are Illegal and a
| violation Of the intent Of the Mills
| paugh bill.
! Appeal by Bank.
! The legality Of the recent prac-
/ tice of some national banks in estab-
; fishing, branches was brought before
the Supreme Court in an appeal by
! the First National Bank i'll St. Louis
| to have set aside the decision of the
! Missouri courts holding that national
banks were subject TO the oranch
banking laws of the states.
"a
necticut. Illinois. Indiana. Iowa. Kan
! sas. Kentucky. Minnesota. Nebras ska.
| North Dakota, New Mexico. Okla
| homa. South Dakota. Utah. Washing,
! Wyoming-joined Missouri in assert
! ing state control over national as
! we'll as state and private banks in
! matters OF such vital Importance as
! the establishment of branches. After
/ the case had been once argued and
| had been set for reargument the fed
{ eral government was permitted 10 IN :
! teryene, and supported the ST. Louis
! and a number of other national banks
| in the contention that states had no
| jurisdiction over matters controlled
| by the national banking laws
!. Attack on Practice.
/: Declaring branch banking destruc-
tive, centralizing and monopolistic.
the states insisted that it would be
demoralizing to their banking sEs-
TENS should natlOral banks De per-
,mitted to engage in such practice
while their own institutions We're
prohibited. When federal authorities
fail to enforce the laws of Congress-
! the states asserted, the states may 20
into the courts to have them en1orc.
ed, especially when such enforcement
lis considered by the states essential
to the preservation of the rights OF
their citizens and the protection OF
their personal and property rights.
THE states insisted that as distinct
isovereignties they had the right to
iprotect their own sovereignty as well
as the rights of their citizens
l"against the ravages of unlawful
iconduct" alleged on the part of fed
eral officials.
| Admitting the constitutionality OF
the federal banking laws, and con-
feeding that they could not prevent
the location of national banks withln
their borders, the states insisted that
the national banks by their charters
were authorized to establish only one
| banking institution.
Each branch bank, such as that
] established by the st. Louis National
! Bank. was a distinct banking unit
F.! the state insisted. although 1T was
! conducted under direction of the off,
GERS of the parent bank. They de-
| cIared that in practice there was nc
| material differentiation betwcer
/ branch banks, which Attorney Cen
| eral Daugherty in an opinion had
! held unlawful. and branch offices
which he had declared permissible
! They also recalled that George w.
lWickersham while Attorney General
\ bod hold tbat national hanks were