Amicus Curiae Brief — United States Nat. Bank of Ore. v. Independent Ins. Agents of America, Inc.

| ~ FILED

HOV 20 1992

No. 92-484

a TE CLERK

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1992

UNITED STATES NATIONAL BANK OF OREGON

Petitioner,

Vv.

INDEPENDENT INSURANCE AGENTS OF AMERICA, et al.,

Respondents.

On Petition for Writ of Certiorari

To the United States Court of Appeals

For the District of Columbia Circuit

BRIEF OF THE AMICI CURIAE

AMERICAN BANKERS ASSOCIATION, ET AL.,*

IN SUPPORT OF THE PETITIONER

JOHN J. GILL III

Counsel of Record

MICHAEL F. Crotty

AMERICAN BANKERS ASSOCIATION

1120 Connecticut Avenue, N.W.

Washington, D. C. 20036

(202) 663-5026

Attorneys for Amici Curiae

November 20, 1992

{[*“Complete List of sponsoring organizations and counsel

on inside of cover.]

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

RICHARD M. WHITING

ASSOCIATION OF BANK HOLDING COMPANIES

730 15th Street, N.W.

Washington, D.C. 20005

(202) 393-1158

JAMES T. MCINTYRE

McNAIR LAW FIRM

1155 15th Street, N.W.

Washington, D.C. 20005

(202) 659-3900

Attorney for Association of

Banks in Insurance

MARCIA Z. SULLIVAN

CONSUMER BANKERS ASSOCIATION

1000 Wilson Boulevard

Arlington, Virginia 22209

(703) 276-1750

LEONARD J. RUBIN

BRACEWELL & PATTERSON

2000 K Street, N.W.

Washington, D.C. 20006

(202) 828-5800

Attorney for Independent Bankers

Association of America

KATHLEEN A. TAYLOR

KANSAS BANKERS ASSOCIATION

1500 Merchants National Bldg.

8th & Jackson

Topeka, Kansas 66612

(913) 232-3444

JOHN S. JACKSON

MINNESOTA BANKERS ASSOCIATION

730 Second Avenue South

Minneapolis, Minnesota 55402

(612) 338-7851

WADE L. NASH

MISSOURI BANKERS ASSOCIATION

207 E. Capitol

Jefferson City, Missouri 65101

(314) 636-8151

OREGON BANKERS ASSOCIATION

JOHN E. KNIGHT

BOARDMAN, SUHR, CuRRY & FIELD

P.O. Box 927

Madison, Wisconsin 53701

(608) 257-9521

Attorney for Wisconsin Bankers Association

QUESTION PRESENTED

Whether the inadvertent clerical misplacement of

quotation marks in an enrolled statute in 1916 can

effect the repeal of Section 92 of the National Bank

Act.

TABLE OF CONTENTS

REASONS FOR GRANTING THE WRIT ........cccccccsceoceeee

I. The Conflict Among The Circuits ................

II. The Important Question of Federal Law ....

CONCLUSION

ehhh LLL EEE eet

TABLE OF AUTHORITIES

CASES:

American Land Title Association v. Clarke, 968

F.2d 150 (2d Cir. 1992), itions for

cert.pending, Nos. 92-482, 92-645 .00000000000..0....

Board ) aaa of the Federal Reserve System

v. Dimension Financial Corp., 474 U.S. 361

GERI? constususseresiitsevensnsntntntnntnecentnsstianmemmmanmemmmane

Commissioner of Internal Revenue v. First Security

Bank of Utah, 405 U.S. 394 (1972) ................

Commissioner of Internal Revenue v. W. Morris

Trust, 367 F.2d 794 (4th Cir. 1966) ...............

Crawfert-y. Burke, 195 U.S. 176 (1904) ...............

Exchange Bank of Commerce v. Meadors, 199 Okla.

& of ll

First National Bank of Lamarque v. Smith, 610

F.2d 1258 (5th Cir. 1980) .............ccccccecceescesees

Greene v. First National Bank of Thief River Falls,

172 Minn. 310, 215 N.W. 213 (1927) .............

M Co. v. Z1I.D. Associates, 506 F.

Supp. 101 (S.D.N.Y. 1980) ........ccccccccsccsceeceeees

Independent Insurance A of America v. Board

Governors of the Feira Reserve System,

Independent Insurance Agents of America v. Clarke,

955 F.2d 731 (D.C. Cir. Soon ibadieabinneineeenens

Independent Insurance —* America v. Hei-

mann, 613 F.2d 11 De. Cir. 1979), cert.

denied, 449 U.S. 823 (1980) .o....ccccccccccccceeceeee

Marshall National Bank v. Corder, 169 Va. 606,

194 S.E. 734 (Va. Ct. App. 1938) 0000000000000...

Owensboro National Bank v. Moore, No. 91-3, (E.D.

A a appeal pending, Nos. 92-6330, 6331

Richards v. United States, 369 U.S. 1 (1962) .......

iv

Table of Authorities Continued

Page

Salyersville National Bank v. United States, 613

F.2d 650 (6th Cir. 1980) .oo.ceecccccccccsceseesceosss. 6

Sazon v. Georgia Association Ay gage Insur-

ance Agents, 399 F.2d 1010 (5th Cir. 1968) ... 6

—— v. Kerr, 555 F. Supp. 1090 (S.D. Ohio

scupreeedtinenensenenessesanensesnsteessenssnsienncntitneiienns:, 7

Union National Bank of St. Louis v. Matthews, 98

I cl 9

United States v. Shreveport Grain and Elevator C be

4» |, | arn! anette ‘ » 10

Variable Annuities Life Insurance Co. v. Clarke,

786 F. Supp. 639 (S.D. Tex. 1991), appeal

pending, No. 92-2010 (5th Cir.) ...................... 7

Washington Agency Inc. v. Forbes, 309 Mich. 683,

16 N.W.2d 121 (1944) ooo cccccceees., Sanpepiuases 7

STATUTES:

12 U.S.C. § 24 (Seventh) 2.0.0 ccccccccccceeeeeceees... 7

Rie MO, a passim

Pub. L. No. 63-64, 38 Stat. 251 ESSE 11

Pub. L. No. 65-121, 40 Stat. 506 | 5

Rev. Stat. section 5202 ...............ccececsessess---......... passim

MISCELLANEOUS:

1991 Bank Insurance Activities Conducted

by The ee Be ion of

America & Wyatt Company (1990) ......... 3

KS.

IN THE

Supreme Court of the Gnited States

OcTOBER TERM, 1992

No. 92-484

UNITED STATES NATIONAL BANK OF OREGON,

Petitioner,

Vv.

INDEPENDENT INSURANCE AGENTS OF AMERICA, et al.,

Respondents.

On Petition for Writ of Certiorari

To The United States Court of Appeals

For the District of Columbia Circuit

BRIEF OF THE AMICI CURIAE

AMERICAN BANKERS ASSOCIATION, ET AL.,

IN SUPPORT OF THE PETITIONER

The American Bankers Association, et al., hereby

respectfully submit this brief as amici curiae in sup-

port of the Petitioners in accordance with the pro-

visions of Rule 37.2 of the Supreme Court Rules. Al]

parties have consented to this filing, and their written

consents are filed with this brief.

INTEREST OF THE AMICI CURIAE

The national and state-based trade associations

sponsoring this brief together represent virtually

2

every commercial bank in the United States and most

of their holding companies (if any) as well.

Commercial banks have relied upon the continued

existence of Section 92 of the National Bank Act for

the past three-quarters of a century in order to act

as general insurance agents in small towns through-

out much of the country. It has been an entirely

reasonable reliance, since the Comptroller of the Cur-

rency, the principal regulator of national banks, has

treated the law as remaining in full force and effect,

as have the courts, state and federal (including this

Court), that have had occasion to deal with the issue,

and as has the United States Congress, which has

purported to amend Section 92 in two instances. It

is a reliance that is not limited to national banks. The

laws of approximately 37 states confer upon their own

state chartered banks, in addition to their specifically

enumerated powers, other powers that are available

to national banks under federal law.

It has proven to be extraordinarily difficult to de-

termine the exact number or identity of commercial

banks operating insurance agencies under the direct

or indirect authority of Section 92. No official records

are compiled or kept, but efforts have been made to

survey the industry by various parties. The Comp-

troller’s Petition for Writ of Certiorari places the

number of national banks doing so at between 90 and

100, and correctly relates that the American Bankers

Association and Oregon Bankers Association have es-

timated a number in the range of 160. (Steinbrink v.

Independent Insurance Agents of America, No. 92-507,

Petition for Writ of Certiorari at 19, n. 11). The

United States District Court for the Eastern District

of Kentucky, in related litigation, has found that ap-

i.

3

proximately 179 national banks in fifteen states ex-

ercise insurance powers pursuant to Section 92.

(Owensboro National Bank v. Moore, No. 91-8, slip

op. at 10 (E.D. Ky. 1992) (appeal pending, Nos. 92-

6330, 6331, 6th Cir.)). A 1990 study performed for

the Independent Bankers Association of America sug-

gests that the number could be considerably higher

than that. (1991 Bank Insurance Activities Survey

Conducted by The Independent Bankers Association

of America & The Wyatt Company (1990) at 7-10).

In addition to the national banks acting under direct

authority of Section 92, the American Bankers As-

sociation has identified approximately 130 state-char-

tered banks, located in small towns. that are offering

insurance services to their customers where the only

statutory authority to do so is a state law providing

that state-chartered banks may provide to their cus-

tomers whatever services a national bank in the state

can provide to customers.

Whatever the exact number of banks, state and

national, that have taken advantage of the statutory

grant of power to banks located and doing business

in small towns, it is clear that this participation is

considerable, widespread, and growing. (See, ¢.9., Ow-

ensboro National Bank v. Moore, supra, in which three

national banks not presently engaged in the insurance

business from their locations in small towns are strug-

gling mightily, over the opposition of the insurance

industry, to utilize the powers granted by the statute.)

It is to protect the present and future interests of

their respective members in the conduct of insurance

activities in small towns that the American Bankers

Association, Association of Bank Holding Companies,

Association of Banks in Insurance, Consumer Bankers

4

Association, Independent Bankers Association of

America, Kansas Bankers Association, Minnesota

Bankers Association, Missouri Bankers Association,

Oregon Bankers Association and Wisconsin Bankers

Association respectfully appear in this case in order

to urge the Court to grant the Petition for Writ of

Certiorari.

REASONS FOR GRANTING THE WRIT

I. The Conflict Among The Circuits

In the case below, the District of Columbia Circuit

held that Section 92 of the National Bank Act, en-

acted in 1916, was effectively repealed two years later

in the context of the enactment of the totally unre-

lated War Finance Corporation Act. Independent In-

surance Agents of America v. Clarke, 955 F.2d 731,

739 (D.C. Cir. 1992). Four months after the D.C.

Circuit opinion, the Second Circuit explicitly rejected

the District of Columbia Circuit’s decision, holding

that whatever it is that happened in 1918 did not

effect a repeal of Section 92. American Land Title

Association v. Clarke, 968 F.2d 156, 152 (2d Cir.

1992), petitions for cert. pending, Nos. 92-482, 92-645.

Rule 10.1(a) of the Supreme Court Rules provides that

one of the ‘special and important reasons’’ that will

be considered by the Court in granting review on writ

of certiorari is “[w]hen a United States court of

appeals has rendered a decision in conflict with the

decision of another United States court of appeals on

the same matter.”

Section 92 of the National Bank Act was enacted

as a part of a then new version of Section 13 of the

Federal Reserve Act—a section of the law that also

amended a pre-existing, substantively unrelated stat-

i

5

ute, Revised Statutes section 5202. The placement of

a pair of quotation marks in the 1916 statute has

given rise to a longstanding academic dispute over

the question whether Section 92 was thereby placed

within the text of the amended R.S. section 5202 or

within the text of Section 13 of the Federal Reserve

Act separately from R.S. section 5202. When Con-

gress passed the War Finance Corporation Act (Pub.

L. No. 65-121, 40 Stat. 506) in 1918, it re-enacted

(with an amendment) R.S. section 5202, without in-

cluding in the amended text the words of Section 92,

leading to the argument that Section 92 was repealed

at that time.

Notwithstanding that, every court that has had oc-

casion to interpret and apply Section 92 in th past

seventy-five years has treated the law as if it has

continued to exist in full force and effect—until the

District of Columbia Circuit’s decision in the case be-

low. Not only is the Circuit opinion in direct conflict

with the Second Circuit’s recent opinion, but it is in

conflict with all of the other court opinions as well:

¢ In Commissioner of Internal Revenue v. First Se-

curity Bank of Utah, 405 U.S. 394, 401-405 (1972),

this Court observed that Section 92 had been omitted

from the U.S. Code in recent editions, but that the

Comptroller of the Currency still considered the law

to be in effect. The Court then proceeded to act as

if the Comptroller were correct by not attributing

income from the sale of insurance to banks that, un-

der Section 92, could not lawfully receive such in-

come.

¢ In Commissioner of Internal Revenue v. W. Mor-

ris Trust, 367 F.2d 794, 795 n.3 (4th Cir. 1966), the

court examined the tax consequences when, in fur-

6

therance of a merger into a national bank, a state

bank was compelled—by Section 92—to spin off its

insurance department.

¢ In First National Bank of Lamarque v. Smith,

610 F.2d 1258, 1261-62 n.6 (5th Cir. 1980), the court

acknowledged the ‘‘considerable discussion” over the

correctness of the U.S. Code’s omission of Section 92

since 1952, and concluded that the “issue appears to

be resolved” in favor of Section 92’s continued ex-

istence, so much so that ‘‘[u]nder these circumstances,

further discussion of the issue seems moot.” (See also

Saxon v. Georgia Association of Independent Insur-

ance Agents, 399 F.2d 1010 (5th Cir. 1968), in which

the existence of Section 92 was unquestionably the

necessary predicate to the court’s conclusions of law.)

¢ Salyersville National Bank v. United States, 613

F.2d 650, 652 (6th Cir. 1980), was another tax case

in which the court followed this Court’s First Security

precedent, noting that ‘‘banks in cities over 5000 pop-

ulation had been and were then barred from selling

insurance by federal banking law, 12 U.S.C. § 92.”

¢ In Independent Insurance Agents of America v.

Board of Governors of the Federal Reserve System,

736 F.2d 468, 476-77 (8th Cir. 1984), the very same

party who is the Respondent here argued that Section

92 of the National Bank Act prohibited national banks

in towns with a population over 5000 from acting as

insurance agents. Necessary to that argument, of

course, is that Section 92 existed in 1984. The Eighth

Circuit did not dismiss the argument out of hand, but

rather, acting as if Section 92 existed, concluded that

it would not be violated by the Federal Reserve’s

approval of certain insurance activities of two bank

holding companies that were sufficiently separated

7

from the bank subsidiaries of the holding companies

so that the activities would not be viewed as those

of the banks.

e Even the District of Columbia Circuit itself has,

in recent past, acted inconsistently with its new view

that Section 92 does not exist. In Independent Bank-

ers Association of America v. Heimann, 613 F.2d

1164, 1170 (D.C. Cir. 1979), cert. denied, 449 U.S.

823 (1980), the court held that the incidental powers

clause of the National Bank Act, 12 U.S.C.

§ 24(Seventh), authorized national banks to act as

agent in the sale of credit life insurance, wherever

the banks were located. The court analyzed Section

92 and concluded that “‘by its own terms [section 92]

does not address the authority of national banks in

larger towns or cities to act as agents for life insur-

ance companies.” (Jd. at n.18) The court would not

have bothered saying that if Section 92 did not exist.

Moreover, it is not an adequate answer to say that

no one in JBAA v. Heimann asked the court to rule

on the existence of Section 92. No one asked the

District of Columbia Circuit to rule on that matter

in this case either.’

‘In addition to these Supreme Court and U.S. Court of

Appeals decisions, lower federal courts and state courts have

discussed, relied on or cited Section 92 innumerable times with-

out ever concluding that it had been repealed. See Variable

Annuities Life Insurance Co. v. Clarke, 786 F. Supp. 639

-(S.D.Tex. 1991), appeal pending, No. 92-2010, 5th Cir.; Owens-

boro National Bank v. Moore, No. 91-3 (E.D.Ky. 1992), appeal

pending, Nos. 92-6330, 6331, 6th Cir.; Thompson v. Kerr, 555

F. Supp. 1090, 1096 (S.D. Ohio 1982); Guaranty Mortgage Co.

v. Z.1.D. Associates, 506 F. Supp. 101, 104(S.D.N.Y. 1980); Ex-

change Bank of Commerce v. Meadors, 199 Okla. 10, 184 P.2d

458, 464 (1947); Washington Agency Inc. v. Forbes, 309. Mich.

8

In light of all the contrary authority, one would

almost be tempted to dismiss the District of Columbia

Circuit opinion as an aberration, unlikely to recur or

be followed elsewhere, except for the fact that the

District of Columbia is the home circuit to the Comp-

troller of the Currency who may be sued there any-

time he approves a proposed activity of a national

bank pursuant to Section 92, or anytime he promul-

gates a rule regarding the insurance activities of small

town banks in the exercise of the rulemaking powers

granted him by Section 92. The insurance industry

has already enunciated its intent to follow precisely

that strategy. See Defendant’s and Intervenors’ Joint

Opposition and Response to Plaintiffs’ Memorandum

of Supplemental Authorities, Owensboro National

Bank v. Wright,? Civil Action No. 91-3 at 5-6 n.3

(February 1992). The conflict needs to be resolved.

II. The Important Question of Federal Law

We have already pointed out above that the decision

of the District of Columbia Circuit below imminently

threatens the business operations and settled expec-

tations of a great many state and national banks and

their customers. That is coupled with the confusion

within the industry and the industry’s regulators, state

and federal, engendered by two diametrically opposed

U.S. Courts of Appeals decisions coming within a few

683, 16 N.W.2d 121, 122 (1944); Marshall National Bank v.

Corder, 169 Va. 606, 194 S.E. 734, 736 (Va.Ct. App. 1938);

Greene v. First National Bank of Thief River Falls, 172 Minn.

310, 215 N.W. 213 (1927).

* This case has subsequently become known as Owensboro Na-—

tronal Bank v. Moore, upon replacement of the Insurance Com-

missioner.

9

months of one another. Further adding to the equa-

tion is the pendency of other litigation in the Fifth

and Sixth Circuits’ that would clearly benefit from

this Court’s resolution of the issue one way or the

other. All together, these factors make this an im-

portant question to the business and governmental

interests of many parties.

But there is also a question raised in the Circuit

opinion that is an important one in a legal sense as

well. It is the court’s perception of its role in con-

struing and applying statutes. The District of Colum-

bia Circuit was unwilling to ‘‘correct{] flaws in the

language and punctuation of federal statutes’ where

to do so would be “‘to reinstate a law that, inten-

tionally or unintentionally, Congress has stricken from

the statute books.’’ Independeni Insurance Agents of

America v. Clarke, 955 F.2d at 739.

The court’s opinion presumes that Congress has

stricken the laws from the books, presumes that ‘‘cor-

recting’”’ punctuation errors would have the effect of

“reinstating’’ the law. But in point of fact, proper

application of the rules of statutory construction

should lead to the conclusion that the law was not

repealed in the first place.

We begin with the a proposition set forth by this

Court long ago: “‘The intent, not the letter of the

statute, constitutes the law.”’ Union National Bank

of St. Louis v. Matthews, 98 U.S. 621, 626 (1879).

The opinion of the court below gives no regard to

the intent of Congress—either in 1916 when it en-

acted Section 92, or in 1918 when it enacted the War

* See n. 1 above.

10

Finance Corporation Act. The District of Columbia

Circuit found that the latter repealed the former

whether Congress intended that result or not.

This Court has also often invoked “the plain lan-

guage of the statute itself’’ as a means of finding

and effectuating Congressional intent, not as an end

in itself. See, e.g., Board of Governors of the Federal

Reserve System v. Dimension Financial Corp., 474

U.S. 361, 373-75 (1986); Richards v. United States,

369 U.S. 1, 9 (1962).

Finally, this Court has held that language is lan-

guage. It does not include punctuation:

Punctuation marks are no part of an act. To

determine the intent of the law, the court,

in construing a statute, will disregard the

punctuation or will repunctuate, if that be

necessary, in order to arrive at the natural

meaning of the words employed.

United States v. Shreveport Grain and Elevator Co.,

287 U.S. 77, 82-83 (1982Xemphasis added).

So little is punctuation a part of statutes that

courts will read them with such stops as will

give effect to the whole.

Crawford v. Burke, 195 U.S. 176, 192 (1904).

An examination of the language of the applicable

statutes shows clearly that Section 92 of the National

Bank Act was never placed within Revised Statutes

section 5202, so that the subsequent changes to sec-

tion 5202 had no effect upon Section 92.4 An ex-

‘ The court below printed the applicable statutes as appendices

to its opinion. We reproduce those appendices as appendices to

this brief as well for convenience.

1]

amination of the origin of the misplaced quotation

marks clearly shows them to be an act of a scribe

and not an act of Congress.

Section 5202 of the Revised Statutes of the United

States was enacted in 1878, derived from Section 36

of the National Bank Act of 1864 which, in turn, was

derived from Section 42 of the National Bank Act of

1863. Generally, it forbade any national bank to be

indebted in an amount exceeding its paid-in capital,

and then set forth four short exceptions to that gen-

eral rule.

In 1913, Congress enacted the Federal Reserve Act,

Pub. L. 63-64, 38 Stat. 251 (1913). Section 13 of the

Act contained a series of unnumbered paragraphs, the

sixth one of which amended R.S. section 5202. That

h contained five numbered subparagraphs.

The first four of them essentially duplicated the orig-

inal four exceptions to the general prohibition against

excess indebtedness of national banks; the fifth one

was a new exception for “‘(IJiabilities incurred under

the provisions of the Federal Reserve Act’’ (emphasis

added). After the fifth numbered subparagraph, there

began a new unnumbered paragraph, authorizing the

Federal Reserve Board to adopt restrictions, limita-

tions and regulations upon the rediscount by a Fed-

eral Reserve bank of certain bills receivable, foreign

bills of exchange and acceptances “authorized by this

Act’’ (emphasis added). (See Appendix A.)

The statute clearly did not make R.S. section 5202

a part of the Federal Reserve Act; otherwise the

internal reference to ‘“‘the Federal Reserve Act’’ in

the fifth numbered subparagraph would have been

superfluous. Similarly, the unnumbered paragraph fol-

lowing the fifth numbered subparagraph was not made

12

a part of R.S. section 5202. If it had been intended

to be a continuation of the fifth numbered subpara-

graph, the internal reference to “this Act” would have

made no sense whatsoever. R.S. section 5202 con-

tained no authorization of bills of exchange or ac-

pees — an authorization was found in the

second an ird unnumbered

13 of the Federal Reserve ee —

In summary, the amendment to R.S. section 5202

was contained only in the sixth unnumbered para-

graph including the five numbered subparagraphs. The

seventh unnumbered h, like the first five,

was part of the then new Federal Reserve Act.

In 1916, Congress amended the Federal Reserve

Act. Among other things, the 1916 statute set forth

a new version of section 13 of the Act “to read as

follows:” The new version (See Appendix B) followed

the same format as the prior version, containing a

series of unnumbered paragraphs. Each of those par-

agraphs—with one exception—was preceded by quo-

tations marks, which was the grammatically correct

os ~- — the phrase “to read as follows.”

ception, of course, is what gives rise to

difficulty here. The unnumbered saenunh Pith

forward the three-year old amendment to R.S. section

5202 was not preceded by a quotation mark. Tex-

tually, this unnumbered paragraph and its five num-

bered subparagraphs remained unchanged (except the

1916 version refers, in the fifth subparagraph, to the

“Federal reserve Act,” whereas in the 1913 version

the second word of that phrase also had an initial

capital letter). The unnumbered paragraph following

the five numbered exceptions was a modification of

the same paragraph as had appeared in the 1913 ver-

13

sion of the Federal Reserve Act. It now provided for

the discount, purchase and sale, as well as the re-

discount of the same bills receivable, bills of exchange

and acceptances “‘authorized by this Act.’’ Again, de-

spite the placement of quotation marks in the 1916

statute, there was no authorization in R.S. section

5202, as amended, for any such bills or acceptances.

As was earlier the case, that authorization appeared

only in the Federal Reserve Act itself. Likewise as

was earlier the case, R.S. section 5202’s fifth num-

bered exception referred not to “this Act,” but rather

to “the Federal reserve Act,”’ as a separate and dis-

tinct statute. The clear import of the words used,

therefore, is that the unnumbered paragraph foilow-

ing the five exceptions was not a part of R.S. section

5202. Once that break is made, it is logical and gram-

matical to assume conclusively that unnumbered par-

agraphs following the bills of exchange and

acceptances paragraph are likewise not part of R.S.

section 5202. The unnumbered paragraph immediately

following the bills of exchange and acceptances par-

agraph is the enactment of what subsequently became

identified as section 92 of the National Bank Act.

That the placement of the quotations marks in the

enrolled statute is an act of a scribe rather than an

Act of Congress is beyond question. Lodged with this

brief as an Exhibit are copies of the Senate and House

Conference Reports on “An Act to amend the Act

approved December twenty-third, nineteen hundred

and thirteen, known as the Federal Reserve Act, by

adding a new section.” The Senate version of the

Conference Report contains no quotation marks in

any relevant spot; the House version of the Confer-

ence Report contains handwritten quotation marks,

14

but in relevant part, those quotation marks are not

where they eventually appear in the enrolled statute.

The unnumbered paragraph preceding the revision to

R.S. section 5202 does not end in a quotation mark

in either the House or Senate version of the Confer-

ence Report, but it does in the enrolled statute. The

paragraph of the bill pertaining to R.S. section 5202

begins with a quotation mark in the House version

of the Conference Report, but the enrolled bill does

not. If either the Senate version or the House version

had made it to the enrolled bill, we would not be

here.

The War Finance Corporation Act, in relevant part,

re-enacted R.S. section 5202 with a new sixth excep-

tion (See Appendix C). It did not pertain to the in-

surance powers and did not repeal those powers since,

as indicated above, Section 92 was not a part of R.S.

section 5202.

The words of the 1916 statute, with the internal

references to “this Act” and “the Federal reserve

Act,”” make sense if and only if the paragraphs fol-

lowing those that obviously amend R.S. section 5202

are not deemed to be made a part of R.S. section

5202. The plain language of the statute must control,

not peculiar quotation marks of unknown origin which

would have the effect of making portions of the stat-

ute gibberish.

15

CONCLUSION

For all of the reasons stated herein and in the

Petition for Writ of Certiorari, we respectfully urge

that the Petition be granted.

Respectfully submitted,

JOHN J. GILL III

Counsel of Record

MICHAEL F. CROTTY

AMERICAN BANKERS ASSOCIATION

1120 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 663-5026

Attorneys for Amici Curiae

November 20, 1992

APPENDIX

ee ee

la

APPENDIX A

Section 13 of Federal Reserve Act of 1913

POWERS OF FEDERAL RESERVE BANKS.

Sec. 13. Any Federal reserve bank may receive ....

*-_* *

Any member bank may accept drafts or bills of

exchange drawn upon it and growing out of transactions

involving the importation or exportation of goods having

not more than six months sight to run; but no bank shall

accept such bills to an amount equal at any time in the

aggregate to more than one-half its paid-up capital stock

and surplus.

Section fifty-two hundred and two of the Revised Stat-

utes of the United States is hereby amended so as to read

. as follows: No national banking association shall at any

time be indebted, or in any way liable, to an amount

exceeding the amount of its capital stock at such time

actually paid in and remaining undiminished by losses or

otherwise, except on account of demands of the nature fol-

lowing:

First. Notes of circulation.

Second. Moneys deposited with or collected by the asso-

ciation.

Third. Bills of exchange or drafts drawn against money

actually on deposit to the credit of the association, or due

thereto.

Fourth. Liabilities to the stockholders of the association

for dividends and reserve profits.

Fifth. Liabilities incurred under the provisions of the

Federal Reserve Act.

The rediscount by any Federal reserve bank of any bills

receivable and of domestic and foreign bills of exchange,

and of acceptances authorized by this Act, shall be subject

to such restrictions, limitations, and regulations as may

be imposed by the Federal Reserve Board.

2a

APPENDIX B

1916 Amendments to Federal Reserve Act of 1913

CHAP. 461.—An Act To amend certai j

of the Act entitled “Federal reserve nat” eammanen

ann gaaaad twenty-third, nineteen hundred and thir-

n.

Be it enacted by the Senate and House of R .

sentatives of the United States of Form aby Con.

gress assembled, That the Act entitled “Federal

—, a. pry December twenty-third,

undred and thirteen, be,

amended as follows: ' ws

That section thirteen be, and is h

to read as follows: aoe eee

“Any Federal reserve bank may make advances

to its member banks on their promissory notes for

a period not exceeding fifteen days at rates to be

established by such Federal reserve banks, subject

to the review and determination of the Federal

Reserve Board, provided such promissory notes are

secured by such notes, drafts, bills of exchange, or

bankers acceptances as are eligible for rediscount

or for purchase by Federal reserve banks under the

provisions of this Act, or by the deposit or pledge

of bonds or notes of the United States.”

Section fifty-two hundred and two of

Statutes of the United States is hereby nt

as to read as follows: “No national banking associa-

tion shall at any time be indebted, or in any way

lable, to an amount exceeding the amount of its

capital stock at such time actually paid in and

remaining undiminished by losses or otherwise,

3a

except on account of demands of the nature follow-

ing:

“First. Notes of circulation.

“Second. Moneys deposited with or collected by

the association.

“Third. Bills of exchange or drafts drawn against

money actually on deposit to the credit of the asso-

ciation, or due thereto.

“Fourth. Liabilities to the stockholders of the

association for dividends and reserve profits.

“Fifth. Liabilities incurred under the provisions of

the Federal reserve Act.

“The discount and rediscount and the purchase

and sale by any Federal reserve bank of any bills

receivable and of domestic and foreign bills of

exchange, and of acceptances authorized by this

Act, shall be subject to such restrictions, limita-

tions, and regulations as may be imposed by the

Federal Reserve Board.

“That in addition to the powers now vested by law

in national banking associations organized under

the laws of the United States any such association

located and doing business in any place the popula-

tion of which does not exceed five thousand inhabi-

tants, as shown by the last preceding decennial

census, may, under such rules and regulations as

may be prescribed by the Comptroller of the

Currency, act as the agent for any fire, life, or other

insurance company authorized by the authorities of

the State in which said bank is located to do busi-

ness in said State, by soliciting and selling insur-

ance and collecting premiums on policies issued by

such company: ... Povided [sic], however, That no

such bank shall in any case guarantee ... the pay-

ment of any premium on insurance policies issued

through its agency by its principal: And provided

4a

further, That the bank shall not guarantee the

truth of any statement made by an assured in filing

his application for insurance.

“Any member bank may accept drafts or bills of

exchange drawn upon it ... Provided further, That

no member bank shall accept such drafts or bills in

an amount exceeding at any time the aggregate of

one-half of its paid-up and unimpaired capital and

surplus.”

5a

APPENDIX C

Section 20 of the War Finance Corporation Act of 1918

Be it enacted by the Senate and House of Representa-

tives of the United States of America in Congress

assembied,

TITLE I.—WAR FINANCE CORPORATION.

Sec. 20. Section fifty-two hundred and two of the

Revised Statutes of the United States is hereby amended

so as to read as follows:

“Sec. 5202. No national banking association shall at any

time be indebted, or in any way liable, to an amount

exceeding the amount of its capital stock at such time

actually paid in and remaining undiminished by losses or

otherwise, except on account of demands of the nature fol-

lowing:

“First. Notes of circulation.

“Second. Moneys deposited with or collected by the

association.

“Third. Bills of exchange or drafts drawn against

money actually on deposit to the credit of the associa-

tion, or due thereto.

“Fourth. Liabilities to the stockholders of the asso-

ciation or dividends and reserve profits.

“Fifth. Liabilities incurred under the provisions of

the Federal Reserve Act.

“Sixth. Liabilities incurred under the provisions of

the War Finance Corporation Act.”