# Amicus Curiae Brief — First National Bank v. Union Trust Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386003_0398%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1917 - **Citation:** 244 U.S. 416 ## Text INDEX. Page. STATEMENT OF THE CASE .........-.____-. 1-3 SPECIFICATION OF ERROR ......._......_.- 3 SYNOPSIS OF ARGUMENT..._..____........ 3-6 I. JURISDICTION. Mini ake vidiges 7-9 A State court is without ‘jurisdiction to enjoin the operation ofa Federalagency.. 7-9 Ableman v. Booth, 21 How. 506. State v. Curtis, 35 Conn. 374. Tarble’s Case, 13 Wall. 397. Van Reed v. People’s National Bank, 198 U.S. 554, 557. II. CONSTITUTIONALITY OF SECTION 11 (K) OF THE FEDERAL RESERVE ACT....... 9-62 (1) Every intendment is in support of the constitutionality of the act. The courts invariably hold that an act of Congress is constitutional unless its repugnancy to the Constitution is clearly apparent. . -- -- er 9 Buttfield v. Stranahan, 192 U. 8. 470, 492, (2) It is well settled that Congress has the power to incorporate banking associa- tions to be used as instrumentalities of the Government in the conduct of its fiscal affairs... _. --- Lae ae Easton v. —— 188 U, Ss. 220, 229. McCulloch v. Maryland, 4 Wheat. 316, 401. Osborn v. U. Ss. Bank, 9 Wheat. 738, 861 (and cases cited in brief, pp. 9, 10). (8) The power to create carries with it the power to preserve. Congress may vest national banks with any powers it deems necessary to preserve the na- tional banking system or the corporate entity of individual banks... ........-.. 11-37 §2274—-17——1 (1) II II. CONSTITUTIONALITY OF SEC. 11—Con. Page. (a) The powers granted to such an associa- tion may be either public or private in RN hahha ba oe nya ean e wh Oe we 11 Osborn v. U.S. Bank, supra, pp. 860, 865. (b) Every banking association organized under Federal law since 1791 has been endowed with powers purely private in nature, which powers have been ex- ercised for its own advantage in legiti- mate competition with other corpora- ee ee ee oa ea 14 (c) These powers, though private in nature, need not be even incidental to the con- duct of the Government’s fiscal affairs. It is sufficient if they are necessary to the successful operation of the bank. The character of the powers and the degree of their neces- sity are matters of legislative discre- ain ah ai nh. nh oe ew da Seki en we 15 Easton v. Iowa, 188 U.S. 220, 238, Osborn v. U. 8S. Bank, supra, pp. 860, 861, 864. (d) While it is not essential that the powers conferred be incidental to the ordinary banking functions, nevertheless the powers specified in section 11 (k) are, in fact, exercised quite generally by corporations which also exercise com- mercial banking powers and are simi- lar in many respects to other corporate powers exercised by commercial banks, including national banks - - - .. 21 (e) The laws of 44 of the 48 States and also of the District of Columbia provide for the formation of corporations with authority to exercise both fiduciary powers and commercial banking pow- Wa Lee DN waka cae ee he dee tee cen 27 (BRE esis TIr II. CONSTITUTIONALITY OF SEC. 11—Con. Page, (f) In order to compete successfully with corporations organized or operating under State banking laws, national banks must be given powers substan- tially similar to those en joyed by such State corporations, It was therefore hot an unreasonable exercise of its dis- cretion for Congress to determine that the powers of national banks should be enlarged by the addition of those specified in section 11 (k) of the Fed- eral Reserve Act.........0.. 32 (4) Section 11 (k) has a direct relation to the underlying purpose of the Federal Re- serve Act, to wit, the creation of a new basis for nonmetallic currency, to be Supported by a cohesive banking sys- tem which should include a majority of the banks of the United States, and insure a currency stable in character andelasticin volume —s_ eee | | (a) The currency system created by the National Bank Act was made neces- sary by lack of uniformity and by in- stability of the State bank note... .. 39 (6) Experience has demonstrated that while the National Bank Act provided a uni- form and stable currency system it lacked elasticity and was otherwise se ky CE OR Ge eg pee 42 Holdsworth’s Money and Banking, pp. 330, 331. Paine’s National Banking Laws, 7th ed., p. 18, (c) The Federal Reserve Act is designed to remedy these defects while preserving uniformity and stability........_. 45 (4) Section 11 (k) is a necessary factor in providing a more elastic currency and in insuring stability of the new cur- rency system provided by the act____ 48 4 . ¥ ‘ i g a pe 1 Lemnenes.,| FORA MLNOE EGR Na al BES Sa ES Rig ROR EE Ns ies IV II. CONSTITUTIONALITY OF SEC. 11—Con. Page. (5) The section is not a delegation of legis- lative authority. The Federal Re- serve Board is not empowered to permit any national bank to exercise any fiduciary power not enumerated in section 11 (k). Its power is ad- ministrative, not legislative....._.... 51-54 Mutual Film Co. v. Ohio Industrial Com- mission, 236 U.S. 230. People v. Brady, 271 Ul. 100. United States v. Grimaud, 220 U.S. 506. (6) Neither the granting nor the exercise of the powers in question involves any invasion of the sovereign rights of the States. The opinions of the Illinois and Michigan courts in this regard are based upon a manifest misappre- hension of the effect of the exercise of these powers..................... 55-62 I 2a Se ay ee i cae ask 63 SINS 525s ina. ecu waeew alee we cans 64 AUTHORITIES CITED. Page. Ableman v. Booth, 21 How. 506____.__- ‘i 7 American Can Co. v. Williams, 178 Fed. Rep. 420. 25 Boone County Nat. Bank v. Latimer, 67 Fed. Rep. 27 -- 26 Buttfield v. Stranahan, 192 U.S. 4702... 222-222.) 9,53 Christopher v. Norvell, 201 U.S. 216... ...... 2... -- 10 Dolley v. Abilene Nat. Bank, 179 Fed. Rep. 461... -- 10 Drover’s Nat. Bank v. O’ Hare, 119 Ill. 646... 88. 26 Easton v. fowa, 188 U.S. 220... .. .. 2... -.-----. 10, 20 Farmers’ Nat. Bank v. satus ta. | ee 10,19 Field v. Clark, 143 U.S. 649... _ - netbeans = 52 Hall v. Geiger-Jones Co. (No. 438, Oct. Term, 1916) _- 53 Hepburn v. Griswold, 8 Wall. 603_........-.---.-- 9 ¥ Page. Intermountain Rate Cases, 234 U.S. sg ge Eee 53 Interstate Com. Comm. v. Goodrich Trans. Co., 224 U.S. Serpe KabaUGnsaheg enue cpa pee ee 54 Kans. City So. Ry. Co. v. United States, 23) U.S.423:/ “4 Knox v. Lee and Parker v. Davis (Legal Tender Cases), 12 Wall. 457____ _- Molsha tt Te eee ae 19 Larabee v. Dolley, 175 Fed. ot sins CE 10 Legal Tender Case, 110 U.S, 421. SS Senha ee: 9 Legal Tender Cases (Knox v. Lee and Parker v. Davis), 12 Wall. 4 ERE Or nee oa eae i) Luxton v. North River Bridge Co., 153 U.S. 525. _. ne 9 Massey v. Fisher, 62 Fed. 26 MeCulloch v. Maryland, 4 Wheat. 316. __ ----- 9,10, 18, 60 Mercantile Bank v. New York, 121U.8.138... 0 = 40 Mercantile Trust Co. v. Texas & P. Ry. Co., 216 Fed. “cise, thomas TENE oe ee re 10 Merchants Nat. Bank v. United States, 214 U.S. 33_. 40) Merrick v. Halsey (No. 413, Oct. Term, 1916). __ 53 Monongahela Bridge Co. v. United States, 216 U.S.177. 53 Montagu v. Pacific Bank, 81 Fed. Rep. 602......... 26 Mutual Film Corp. v. Ohio Industrial Comm., 236 U. 8. we ce nhs Ona Saoeeta Ts .-sse- 88,88 Osborn v. U. 8. Bank, 9 Wheat. 738. __- 9,12, 13, 15, 19, 61 Pattison v. Syracuse Nat. Bank, 80N. Y.82... 33 People v. Brady, 271 1.100. pane os Fy Red “C” Oil Oo. v. North Carolina, 222 U.S. 380 __ 54 Richardson v. New Orleans Coffee Co., 102 Fed. Rep. ca Te A ROEE Mache nd team Se es Ase ae Co. 26 Richardson v. Olivier, 105 Wed. Rep. 277......... _. 26 Robinson v. Turrentine, 59 Fed. Rep. 654........._. 10 St. Louis Ry. v. Taylor, 210 U.S. 281. aoe 53 Slaughter-House Cases, 16 Wall. oe a5 9 State v. Kenosha E. R. Co., 145 Wis. 337... __ 54 State v. R. R. Commission, 137 Wis. 80... 54 State ex rel. Wilcox vy. Curtis, 35 Conn. 374___- 8 Tarble’s Case, 13 Wall. 397. SR Gee aly cep ae es, 7 Tennessee v. Davis, 100 U.S. 257. pean ee 8 Tiffany v. Nat. Bank of Missouri, 18 Wall. 409... __ 40 a vi Page. United States v. Grimaud, 220 U. S. 506... ..--..--- 52 Van Reed v. People’s Nat. Bank, 198 U.S. 554...--- 8 Veazie Bank v. Fenno, 8 Wall. 533......--.-..---- 10,41 Wallace v. Stone, 107 Mich. 190... ......----..---- 26 Wilson v. Shaw, 204 U.S. 24... ......-.---------- 10 Holdsworth, Money and pues p. 295 - PPI Trp i, p. 330 - oY NOR 8 Oe eee p. 383 . Fe dg edie ck Lebdy decks tae oon a Paine’s Nat. ae’ Lawes, 7th o¢6., p. 18... ..-.-. 44 White’s Money and Banking, 5th ed., p. 107 --- -- -- 39 ny * RS “ oa wa ee Se 4 i: = e Ye ee ; 3 . © 4 ik ot BE 4 i #3 - ores WR Boag Inthe Supreme Court of the Wnited States, OcroBerR TERM, 1916. First NaTionAL Bank or Bay Ciry, ) plaintiff in error, v. GRANT FELLOWS, ATTORNEY GENERAL OF the State of Michigan, on the relation of Union Trust Co. et al. No. 764. IN ERROR TO THE SUPREME COURT OF THE STATE OF MICHIGAN. BRIEF FOR THE UNITED STATES AS AMICUS CURIAE. STATEMENT OF THE CASE. This case involves the validity of section 11(k) of an act of Congress approved December 23, 1913, known as the Federal Reserve Act. 38 Stat. 251, 262, c. 6. That section gives to the Federal Reserve Board created by the act the following power: Sec. 11(k). To grant by special permit to national banks applying therefor, when 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 pre- scribe. (1) PO ae EET ee Sta ata TK? EEE ELEN MRE PEA 4 PYKSS Cone Gre ee ea ibatarpevesaens 9 -_ The First National Bank of Bay City, Michigan, plaintiff in error, was chartered as a national bank on December 1, 1882, under the National Bank Act of June 3, 1864, 13 Stat. 99, c. 106, as amended. (See the National Bank Act of June 20, 1874, 18 Stat. 123, c. 848; Rev. Stat. sec. 5133, 5136; R. 4.) After the passage of the Federal Reserve Act it became a mem- ber of the system of banks therein established, and, on application, was granted by the board the right to act as trustee, executor, administrator, and regis- trar of stocks and bonds. (R. 5, 10.) On the rela- tion of five trust companies the attorney general of Michigan filed an information in the nature of quo warranto in the Supreme Court of Michigan to pre- vent plaintiff in error from thus acting. (R. 2, 23.) The respondent bank pleaded the statutes and the authority granted in pursuance thereof. (R. 4.) The State attorney general demurred to the plea on the grounds (1) that section 11 (k) is unconstitutional in that it is beyond the authority of Congress to con- fer the power specified upon national banks; (2) that even if Congress possessed such authority it can not delegate it to the Federal Reserve Board; (3) that the granting of the corporate power specified is in contravention of the laws of the State. (R. 11.) The State court sustained the demurrer on the first ground, six of the eight justices expressly finding no contravention of State law. (R. 20-22.) By writ of error the case comes before this court on the plead- ings. (R. 24.) i): a bie bcs By Reektes eis 3 Leave having been obtained, the United States files this brief as amicus curiae. SPECIFICATION OF ERROR. The second assignment of error (R. 25) is as follows: The Supreme Court of Michigan erred in entering a judgment of ouster against the above named respondent, said judgment being based solely upon the decision that the act of Congress above mentioned [§11k] was and is void as beyond the powers conferred upon the Congress of the United States by the Constitu- tion of the United States. Two issues are thus raised: 1. Has Congress power to authorize a national bank to act as trustee, executor, administrator, or registrar of stocks and bonds? 2. Does the Federal Reserve Board in granting the permission authorized by section 11 (k) exercise nondelegable powers of Congress ? SYNOPSIS OF ARGUMENT. I. JURISDICTION. While no jurisdictional question is raised by the pleadings, the Federal Reserve Board, appearing by counsel as amicus curiae, called the attention of the Supreme Court of Michigan to the fact that some doubt exists as to the right of a State court to enjoin and exclude a national bank created as a Federal agency from the exercise of powers granted it by Congress. « Pe a hi ive Sse Retin StS NRIs Sore: 4 Inasmuch as the parties to these proceedings can not confer jurisdiction by consent it seems proper to call to the attention of this court certain cases which have a probable bearing on this subject, although it is the desire of all parties concerned and a matter of great public importance that the determination of the constitutional question involved be expedited as far as possible. If. CONSTITUTIONALITY OF SECTION 11 (K) OF THE FEDERAL RESERVE ACT. (1) Every intendment is in support of the consti- tutionality of the act. The courts invariably hold that an act of Congress is constitutional unless its repugnancy to the Constitution is clearly apparent. (2) It is well settled that Congress has the power to incorporate banking associations to be used as in- strumentalities of the Government in the conduct of its fiscal affairs. (3) The power to create carries with it the power to preserve. Congress may vest national banks with any powers it deems necessary to preserve the na- tional banking system or the corporate entity of in- dividual banks. (a) The powers granted to such an association may be either public or private in nature. (b) very banking association organized under Fed- eral law since 1791 has been endowed with powers purely private in nature, which powers have been exercised for its own advantage in legitimate com- petition with other corporations. ; $ Nee a RE ons 5 (c) These powers, though private in nature, need not be even incidental to the conduct of the Govern- ment’s fiscal affairs. It is sufficient if they are neces- sary to the successful. operation of the bank. The character of the powers and the degree of their neces- sity are matters of legislative discretion. (d) While it is not essential that the powers con- ferred be incidental to the ordinary banking functions, nevertheless the powers specified in section 11 (k) are, in fact, exercised quite generally by corporations which also exercise commercial banking powers and are similar in many respects to other corporate powers exercised by commercial banks, including national banks. (e) The laws of 44 of the 48 States and also of the District of Columbia provide for the formation of corporations with authority to exercise both fidu- ciary powers and commercial banking powers. (f) In order to compete successfully with corpora- tions organized or operating under State banking laws, national banks must be given powers substan- tially similar to those enjoyed by such State corpo- rations. It was therefore not an unreasonable exer- cise of its discretion for Congress to determine that the powers of national banks should be enlarged by the addition of those specified in section 11 (k) of the Federal Reserve Act. (4) Section 11 (k) has a direct relation to the underlying purpose of the Federal Reserve Act, to wit, the creation of a new basis for nonmetallic currency, disitdig eet Sater ay SRA ON Brg SE ye ER SRO REIS 6 to be supported by a cohesive banking system, which should include a majority of the banks of the United States, and insure a currency stable in char- acter and elastic in volume. (a) The currency system created by the National Bank Act was made necessary by the lack of uni- formity and by instability of the State bank note. (b) Experience has demonstrated that while the National Bank Act provided.a uniform and stable currency system it lacked elasticity and was other- wise defective. (c) The Federal Reserve Act is designed to remedy these defects while preserving uniformity and sta- bility. (d) Section 11 (k) is a necessary factor in pro- viding a more elastic currency and in insuring sta- bility of the new currency system provided by the act. (5) The section is not a delegation of legislative authority. The Federal Reserve Board is not em- powered to permit any national bank to exercise any fiduciary power not enumerated in section 11 (k). Its power is administrative. (6) Neither the granting nor the exercise of the powers in question involves any invasion of the sov- ereign rights of the States. The opinions of the Illinois and Michigan courts in this regard are based upon a manifest misapprehension of the effect of the exercise of these powers. ARGUMENT. JURISDICTION. A State court is without jurisdiction to enjoin the operation of a Federal agency. In the case of Ableman v. Booth, 21 How. 506, the Supreme Court of Wisconsin held that the fugitive slave law was unconstitutional and discharged a prisoner held under a warrant issued by a United States Commissioner for aiding and abetting the escape of a fugitive slave, and also discharged the same person from confinement after indictment and conviction in the United States District Court. This judgment of the Supreme Court of Wisconsin was reversed by the Supreme Court of the United States. The same question was presented in Tarble’s Case, 13 Wall. 397, where a soldier in the United States Army was discharged on habeas corpus by a supreme court commissioner of the State of Wisconsin on the ground that he had been unlawfully enlisted while a minor without the consent of his guardian. In both cases the courts of the State were declared by the Supreme Court of the United States to have been without jurisdiction. The fundamental proposition upon which the Able- man and Tarble cases rest is that no State has power to obstruct a Federal officer in the discharge of his duties. It is true, as was argued in the Ableman case, that the Supreme Court of Wisconsin had general jurisdiction to pass upon the constitutionality of the 8 fugitive slave law; it had power to do this in any proceeding which did not directly interfere with or arrest the functions of the Federal Government, but no State can lawfully do an act which will suspend the machinery of the Federal Government. As stated by the court in Tennessee v. Davis, 100 U. 8. 257, 262— “The general government must cease to exist whenever it loses the power of protecting itself in the exercise of its constitutional powers.”’ The principle of these cases would seem to apply to an attempt by the State to enjoin or restrain any Federal agency from the exercise of a right or the performance of a duty arising under a Federal statute. The right of Congress to determine to what extent a State court shall be permitted to entertain actions against national banks and how far these institutions shall be subject to State control, is undeniable. National banks are quasi-public institutions, and for the pur- pose for which they are instituted are national in their character, and, within constitutional limits, are subject to the control of Congress and are not to be interfered with by State legislative or judicial action, except so far as the lawmaking power of the Government may permit. [Van Reed v. People’s National Bank, 4 198 U. S. 554, 557.] 4 Whether the Federal or State courts have juris- q diction in quo warranto proceedings against national j banks was the subject of discussion in the case of State ex rel Wilcox v. Curtis, 35 Conn. 374, in which it was held that an information in the nature of a Wt raters: ie Bae, 9 quo warranto would not lie in a State court to try the right to the office of director in a national bank. Il. CONSTITUTIONALITY OF SECTION 11 (K) OF THE FEDERAL RESERVE ACT. (1) Every intendment is in support of the constitu- tionality of the act. The courts invariably hold that an act of Congress is constitutional unless its re- pugnancy to the Constitution is clearly apparent. In the case of Buttfield v. Stranahan, 192 U. 8. 470, 492, the court says: In examining the statute in order to de- termine its constitutionality we must be guided by the well-settled rule that every intendment is in favor of its validity. It must be presumed to be constitutional unless its repugnancy to the Constitution clearly appears. (Citing Nicol v. Ames, 173 U.S. 509, 514, 515; Gettysburg Park Case, 160 U.S. 668, 680.) See also Hepburn v. Griswold, 8 Wall. 603; Legal Tender Cases, 12 Wall. 457. (2) It is well settled that Congress has the power to incorporate banking associations to be used as instrumentalities of the Government in the conduct of its fiscal affairs. McCulloch v. Maryland, 4 Wheat. 316, 401. Osborn v. U. S. Bank, 9 Wheat. 738, 861. Slaughter-House Cases, 16 Wall. 36, 64. Legal Tender Case, 110 U.S. 421, 445. Luxton v. North River Bridge Co., 153 U.S. 525, 529. 10 Christopher v. Norvell, 201 U.S. 216, 226. Wilson v. Shaw, 204 U.S. 24, 34. Robinson v. Turrentine, 59 Fed. Rep. 554, 555. Dolley v. Abilene Nat. Bank, 179 Fed. Rep. 461, 465. Larabee v. Dolley, 175 Fed. Rep. 365, 392. Veazie Bank v. Fenno, 8 Wall. 533, 551. Mercantile Trust Co. v. Texas and P. Ry. Co., 216 Fed. Rep. 225, 231. Easton v. Iowa, 188 U. 8. 220, 229. Farmers’ Nat. Bank v. Dearing, 91 U. S. 29, 33. As stated by Chief Justice Marshall, in delivering the opinion of the court, in McCulloch v. Maryland, supra (p. 401): The first question made in the cause is, Has Congress power to incorporate a bank? It has been truly said, that this can scarcely be considered as an open question, entirely un- prejudiced by the former proceedings of the 3 nation respecting it. The principle now con- tested was introduced at a very early period of our history, has been recognized by many successive legislatures, and has been acted upon by the judicial department, in cases of peculiar delicacy, as a law of undoubted obligation. * * * * * se eeT Lr BRE EMEA A ESE SL BEL OLE ARE APE LION, The power now contested was exercised by the first Congress elected under the present Constitution. The bill for incorporating the Bank of the United States did not steal upon an unsuspect- 11 ing legislature and pass unobserved. Its prin- ciple was completely understood, and was op- posed with equal zeal and ability. After being resisted, first in the fair and open field of de- bate, and afterwards in the executive cabinet, with as much persevering talent as any meas- ure has ever experienced, and being supported by arguments which convinced minds as pure and as intelligent as this country can boast, it became a law. This decision, which was affirmed and elaborated in the case of Osborn v. U. S. Bank, supra, has been uniformly followed by the later decisions of this court. (3) The power to create carries with it the power to preserve. Congress may vest national banks with any powers it deems necessary to preserve the na- tional banking system or the corporate entity of individual banks. (a) The powers granted to such an association may be either public or private in nature. This question was considered by this court when the constitutionality of the act of Congress creating the first Bank of the United States was before it. An effort was made at that time to sustain the contention that while Congress might have the power to incor- porate a bank to be used as an instrument of the Government in the conduct of its fiscal affairs it could not vest corporations so created with the capacity to engage in private business, but could only authorize the exercise of functions to be performed for the Government. 82274—17——-2 Be J oe ys » +; * ra 3 2 ‘ ag a x @ a 3S = ¥® = . 2 BY: ae a one oe, J 3 i] 4 ‘ uy bid x 2 RY C4 5 4 ba x gg at = a4 % ‘6 # a ta 4 ei re ‘¢ i= et 4 e SRESSSSSESSRSESIERS ON Ne mm ee ee sae NR Re 8RSSFSSSASSSESESITS SA Re RR mR RR RR mw SRRSRSESRSSSRSSITES SSS S82 SSSSSSERAFSERZ ee ee ee eee BSSSESSRSSISSSRSSSS Ce ee osdsanadasaRgsceesg ec) ” SESSSRSSRRSSSESSEKSR (O38 “ye Ser Se tt Sa a a ar ir “tes “ag Se te ee 4 BS Fe CSRS SRA SSS ARS Hse sissiissssueses a Am wm Be a Re km ke ee i a ee ee RIZSSARESBRSRISSSES rt ge a ee Sa Sat Se Se eee a ie Age Pe tS SE Sar a es Se a er Sr gh “Be he Re Rie “ate 4 a hone hehehe tek > b> b> > i> 11> 1.) 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S., 506............. 00. ccc eee eee 12 eda iad oe ig IN THE Supreme Courtof the United States October Term, 1916. No. 764. FIRST NATIONAL BANK OF BAY CITY, MICHIGAN, PLAINTIFF IN ERROR. vs. GRANT FELLOWS, ATTORNEY GENERAL OF THE STATE OF MICHIGAN, ON THE RELATION OF UNION TRUST COMPANY ET AL. REPLY BRIEF FOR PLAINTIFF IN ERROR. POINT I. CONSTITUTIONAL POWERS OF CONGRESS. (c) Implied Powers and the Congressional Discretion. The brief for defendant in error merely amplifies the rea- soning of the Supreme Court of Michigan, which was based upon a misconception of the nature of the tests to be ap- plied to legislation of this nature. The argument that our theory would permit the unreasonable extension of the con- gressional powers, by adding incidental power to incidental power ad infinitum, overlooks the fact that this process is BeBe sm IY SSS BEREAN RSI LS LR I ca SOY NIE EY IE 2 necessarily limited by the limitations of the subject under consideration. The most minute sub-division of a given subject does not enlarge its scope. So long as each step in the process has a logical connection with the preceding step, there is no danger of final transgression beyond prop- er bounds. We have argued merely for the recognition of a Congres- sional-discretion in respect to the means and methods of ef- fectuating powers already recognized. (d) The Nature of Trust Companies. The cases of Mercantile Bank v. N. Y., 121 U. S., 138, and Jenkins v. Neff, 186 U. S., 230. (cited on page 11 of brief for defendant in error) were de- cided when the powers of trust companies in the State of New York were very limited. The Mercantile Bank case was decided in 1887 and the Jenkins case in 1902. The first enlargement of the powers of trust companies in New York was by an amendment of the New York banking law adopted in 1893 which authorized trust companies ‘‘to exercise the powers conferred on individual banks and bankers by Sec- tion 55 of this act, subject to the restrictions contained in said section.’’ Chapter 696, Laws of 1893. Section 55 referred to, provided as follows: ‘‘Eivery bank and individual banker doing business in this state may take, receive, reserve and charge on every loan or discount made, or upon any note, bill of exchange, or other evidence of debt, interest at the rate of 6 per cent per annum, and such interest may be taken in advance, reckoning the days for which the note, bill, or evidence of debt has run.’’ It was not until 1914 that the New York legislature ma- eae Dice 3 terially extended the powers of trust companies in New York by giving them power. “To discount and negotiate promissory notes, drafts, bills of exchange, and other evidences of debt; buy and sell exchange, coin and bullion; lend money on real or personal securities ; and to receive deposits of moneys, securities, or other personal prop- erty from any person or corporation upon such terms as the company shall prescribe.’’ Sec. 185, Banking Law of 1914. The two cases cited must therefore be construed with ref- erence to the statutes in force at the time of their decision. Under any construction, they do not support the position of defendants in error in the present case. In Mercantile Bank v. New York, the point involved was whether the methods used by the State of New York in tax- ing shares of stock in national banks violated the section of the revised statutes providing that state taxation of national bank shares should not be at a greater rate than that as- sessed upon other moneyed capital. In support of the con- tention that national bank stock was unfairly taxed, refer- ence was made to the method of taxing trust companies. ‘he court was distinguishing between banks and trust com- panies merely to the extent necessary to show that there might be a reasonable discrimination in the rate of taxation. The principal point emphasized was the fact that the rate of taxation of national bank stock should be compared with the rate of taxation of the stock of state banks, and that this was a fairer comparison than that between national banks and trust companies. The court merely said that those companies were not banks ‘‘in the commercial sense of that word, and do not perform the functions of banks in carry- ing on the exchanges of commerce.’’ This language did not mean that trust companies, even then, were not banks in some other sense of the word. The language which imme- diately follows shows that the trust companies under con- sideration were banks of deposit, as such banks are defined in the Oulton and Field cases. Mr. Justice Matthews said: LEO TS NTA INR YN OTE SLT REN 4 “They receive money on deposit, it is true, and invest it in loans, and so deal, therefore, in money and securities for money in such a way as properly to bring the shares of stock held by individuals there- in within the definition of moneyed capital in the hands of individuals, as used in the Act of Congress.”’ The real ground of the decision was not any distinction -etween banks and trust companies, but was the conclusion ‘mally reached that there was no real discrimination be- tween national banks and trust companies, so far as the rate of taxation was concerned. Jenkins v. Neff, 186 U. S., 230, involved the same basic question as the case last cited. It was attempted to evade or distinguish the decision in the Mercantile Bank case by relying upon the 1893 amendment to the New York statute above mentioned. The court held that this new legislation did not have the effect claimed, and that there had been no new legislation calling for any qualification of the decision in the Mercantile Bank case. In holding that there was no unlawful discrimination, the court pointed out the difference between the statutory requirements in regard to the invest- ment of the capital of national banks and trust companies, arguing that these differences might reasonably support some differences in the rate and method of taxation. The lan- guage quoted by counsel was designed merely to illustrate some of the differences between trust companies and other banking corporations as bearing on the propriety of discrim- ination in respect to the rate and manner of taxation. The court was not arguing that banks and trust companies were essentially or vitally different, but merely that there was a difference in the primary purposes of their organization. No one would attempt to deny this fact, but it is of no greater significance in the case at bar than the fact that there may be a difference between the primary purposes of the organization of a national bank and of a savings bank designed for philanthropic purposes. It is not the primary object in the minds of the incorporators which is the con- trolling question in the case at bar. Neither is the case con- trolled by any superficial differences between trust com- panies as commonly organized and banks as commonly or- 2 5 ganized. Mr. Justice Brewer’s opinion in Jenkins v. Neff, (p. 237), recognized the propriety of investing trust com- panies ‘‘with some of the powers of banking associations as an inducement to perform the other duties and obligations imposed by the state.’’ It is equally proper to invest banks with some of the powers of trust companies, as an induce- ment to perform the other duties and obligations imposed by congress. If the conferring of banking functions upon trust companies does not make them banks, neither does the conferring of trust company functions upon banks make them trust companies. The distinction between identity and similarity must be kept n. mind. The two classes of cor- porations, although entirely distinct, are essentially similar. (e) There Is No Invasion of State Rights. The claimed exclusive jurisdiction of the several states over persons and property within their territory, begins only where the federal jurisdiction ends. The power of the fed- eral government, is confined within certain definite channels, but within those channels it is absolute and paramount. If any legislation is concerned with a proper subject of federal activity, the nature of the private property or interests af- fected cannot be considered as invalidating it. Questions involving national banks, or interstate com- merce, or any of the other great branches of federal activ- ity are completely within the control of Congress, and, in case of conflict, both state rights and private rights must give way. It is therefore entirely misleading to argue that there are certain private rights and privileges which as such are beyond the control of Congress. If they are be- yond the control of Congress, it is not because they involve the internal affairs of the states, or the private rights and privileges of their citizens, but solely because they do not happen to be included within any of the constitutional pow- ers of the federal government. Using, as an illustration, the power of Congress over na- tional banks, we find that whenever there is any real con- flict, both state laws, and private rights must give way. REM EAT RENEE ITN YEE UTS PAO RIAD EN ME 6 ‘‘The states can exercise no control over them, nor in any- wise affect their operation except in so far as Congress may see proper to permit.’’ It was so held in regard to the ap- plication of state usury laws. Farmers, etc., Bank v. Dearing, 91 U. S., 29. The subjects referred to in Section 11-k are no more ‘‘pe- culiarly matters for state regulation’’ than is the question of the amount of interest which citizens of the various states can be compelled to pay on their private loans from national banks, or the protection by the states of their, citi- zens from the enforcement of usurious contracts. Yet in respect to these matters the state laws must give way, ex- cept as they have been confirmed and re-enacted by act of congress. To argue that any matter is purely a subject of state regulation because of the nature of the interests affect- ed is begging the question. The test is to be found not in the effect of the legislation on the state or its citizens, but in the subject of the legislation, as being included in or ex- cluded from the great subjects over which congress is given jurisdiction. The control of national banks is one of these subjects, and any incidental feature of this control derives its validity from the fact that it is such a feature, regard- less of the nature of the private interests affected. The cases cited by counsel for defendant in error are not in conflict with our position. Pennoyer v. Neff, 95 U. S., 714, did not involve any con- flict between state and federal authority. The language quoted was not intended to sustain the authority of the state as against that of the federal government, but to protect each sate against unlawful interference with its citizens by the governments of other states. Overby v. Gordon, 177 U. 8., 214, merely followed the rule of Pennoyer v. Neff, in a case still more unlike the case at bar. The question decided was that ‘‘the sovereignty of the State of Georgia and the jurisdiction of its courts did not extend to and embrace property not situated within the territorial jurisdiction of the state.’’ (P. 222.) 7 Brown v. Fletcher’s Estate, 210 U. S., 82, was another case which limited state, not federal, authority. A Massa- chusetts judgment was held unenforcible against a Michigan estate. U. S. v. Fox, 94 U. S., 320, involved a devise of real es- tate to the federal government. The court held that the state statute limiting the devise of real estate to corporations, would control, as ‘‘the title and modes of disposition of real property within the state * * * are not matters placed under the control of federal authority.’’ Michigan Trust Company v. Ferry, 228 U. S., 353, again involved a mere question of the extra-territorial effect of ju- dicial proceedings in the state courts. Dickinson v. Seaver, 44 Mich., 624, merely held that ‘‘No administration is extra-territorial’’ and that ‘‘no judgment ean be enforced outside of the jurisdiction rendering it’’; also that a federal decree could not interfere with state pro- bate proceedings. No question affecting the peer of Con- gress was in any way involved. Lafferty v. Bank, 76 Mich., 35, merely determined the rights and liabilities arising from the giving of a residuary legatee’s bond. The questions at issue in the case at bar were not even remotely involved. American Missionary Association v. Hall, 138 Mich., 247, merely denied the power of a Probate Court of Ohio to re- move a Michigan executor. Not one of the above decisions is in point in the case at bar. None of them established ‘‘the right of the state to exclusive jurisdiction over property within the state.’’ (See brief for defendant in error, page 13.) If this sweeping doctrine were established, nothing would be left of the rule exempting national banks and other federal agencies from state interference. Counsel’s argument proves too much. If it is sound, the national bank act must give way to state legislation, in all cases of conflict, and the case of Farmers Bank v. Dearing, 91 U. S., 29, and the many other cases up- 8 holding the paramount power of Congress over all federal agencies must be overruled. We disagree with counsel that the subjects covered by section 11-k are ‘‘peculiarly matters for state regulation.”’ We see no logical difference in this respect between these, and the other purely private functions of national banks. he handling of a trust fund, or of an estate, or the holding of a trust mortgage is no more a private or personal trans- action than the receipt of funds on deposit, the issuance of certificates of deposit, the discounting of commercial paper, or the loan of funds on collateral security. The distinctions sought to be made are purely arbitrary. Moreover, Section 11-k expressly avoids any possible conflict with the state sovereignty by permitting the applica- tion of the section only when it is ‘‘not in contravention of state or local law.’’ This constitutes a voluntary abdication by Congress in cases of conflict, where its authority would otherwise be paramount. POINT II. Regulatory Legislation. If the provisions made by Congress for regulating the exercise of ‘the powers conferred by Section 11-k are still incomplete, that it is matter for Congress to remedy. The incomplete exercise of any lawful power does not destroy its legality. The claimed assumption of exclusive authority by the states raises in a disguised form, the question whether the provisions of Section 11-k are ‘‘in contravention of state law,’’—a question which was of course finally decided by the Supreme Court of Michigan. The Illinois court (in People v. Brady, 271 Ill., 100) also confused this question with that of the ‘‘invasion of state rights.’’ The two are Se 2 9 in fact entirely distinct. The questicn of the ‘‘invasion of state rights’’ involves only the question whether Congress is legislating in regard to a proper subject of federal legis- lation. The question of ‘‘contravention’’ involves the ques- tion whether the actual carrying into effect of this legisla- tion has resulted or will result in a conflict of laws. The subject of the act of Congress here involved is merely the enlargement of the corporate capacities of national banks. It is an extraordinary claim that any legislative body ex- cept Congress itself, is concerned with this subject. We think that counsel confuse the question of the capacity of a national bank to act as fiduciary, with that of the wisdom of its selection or its proper qualification to act as such in a particular case. In Michigan the mere fact that national banks are, and always have been subject to the supervision of the Comp- troller of the Currency, has never made their business an unlawful one from the point of view of the state authorities, and this fact will remain true even if trust functions are added to the functions previously exercised by such banks. Congress by the enactment of Section 11-k, did not in- tend to and could not compel the appointment of a national bank as a fiduciary in any case, but merely authorized such appointment. The result was merely to broaden the field of choice of the appointing court or person. To whatever extent the Probate Courts of the State may have exclusive jurisdiction in such matters, such jurisdic- tion would not be impaired by the mere addition of another class of corporations which might be considered at the op- tion of those interested in the appointment of executors and administrators. The application of Section 11-k would therefore not interfere with any feature of the state Pro- bate Court jurisdiction or procedure. The state has passed laws governing the state banks which are fully as elaborate as the ‘so-called trust company act. The national banks are operating in entire disregard of these laws and yet neither the state banks, nor the state a SOMA ST Ny AACE ARES 2 ROMER EE ON GREENE N SE gE IEEE IE Ft 10 government, nor the citizens of the state are injured thereby. The fact that there might be some incidental difference be- tween the regulations prescribed by the state for trust com- panies and the regulations prescribed by the federal gov- ernment for national banks would be of no greater import- ance to the persons dealing with each than are the present differences between the state and federal methods of regu- lating the banking business. The construction and effect of the state laws are disposed of by the opinion of the Supreme Court of Michigan in the present case. Mr. Justice Ostrander, speaking for the majority (Rec., pp. 20-21), said: ‘“‘There is, therefore, no State policy opposed to corporate trustees, executors or administrators. No corporation, and for that matter no individual, can in any event act in any of the capacities indicated except by appointment. And a corporation, or an individual, in such relations, is governed by the laws of the State and the orders of State courts. ‘National banks are, and are not, foreign corpora- tions. They are creatures of congress, agencies of the federal government, domesticated in the state. They may sue and be sued in the courts of the state, but the powers they shall possess, their management and control are beyond state authority, except that a bank like the respondent may not exercise certain powers—cannot lawfully possess them—in contraven- tion of state law. ‘““No state law is contravened—opposed, come into conflict with—because a corporation exercises the in- dicated powers, nor by the act of congress creating national banks. The legislature has not declared that national banks in this state shall not have the right ‘to act as trustee, executor, administrator, or regis- trar of stocks and bonds.’ ‘«“* * * To say that because the legislature has re- quired certain things of a domestic corporation as a condition to the exercise of the right and cannot re- LEGALS ISS EIEN LED ERI SING I SEY SEARHCES EE TE BAD ARISE NT ATES ERURTRS A SE ON I 11 quire the same, or similar, things from national banks, therefore the exercise of the right by national banks will be in contravention of state law, seems to me to be an unsound argument. The bank is here, with such structure as Congress has given it, and Congress has in terms declared that among other functions it may perform that of a trustee, ete., if any body wants it to. The mere element of safety of a fund is a matter to be considered by those ap- plying to the corporation to take charge of it, or by the court making an appointment. That one may re- gard the domestic corporation as the safer institu- tion is not evidence that the other, if it acts, acts in contravention of state law. Certain safeguards sur- rounding the execution of trusts, ete., by domestic corporations are lost when individuals are appointed to execute them. The individual does not therefore act in contravention of state law. ‘‘Mr. Justice Brooke does not point out in what way, if respondent acts within its apparent powers, the operations of any state law governing trusts, or the settlement of estates, will be interefered with. I am not content to rest so important a decision upon a doubtful inference.’’ POINT III. Delegation of Legislative Powers. The cases cited by relators’ counsel are not controlling. The reasoning of these cases might be applicable if Section 11-k had given to the Federal Reserve Board the right— ‘‘to grant by special permit to national banks apply- ing therefor such additional rights, powers and privi- leges as the board may approve.’’ Such an unlimited delegation of authority would, doubt- less, be void. Section 11-k, however, delegates no such au- ORES LR SGD IES AOS SEG DEY NATAL ESATA SUR IT ED ERE DR 12 thority, but merely leaves to the board some administra- tive discretion in respect to certain definitely specified pow- ers. The primary authority to exercise these powers comes from the statute which enumerates them, not from the board which merely administers the statute. The following quotations from some of the decisions cited in our original brief furnish a complete answer to counsel’s contentions. ‘“‘From the beginning of the government, various j acts have been passed conferring upon executive of- ; ficers power to make rules and regulations, not for : the government of their departments, but for admin- istering the laws which did govern. None of these statutes could confer legislative power. But when Congress had legislated and indicated its will, it would give to those who were to act under such gen- eral provisions ‘power to fill up the details’ by the establishment of administrative rules and regulations, the violation of which could be punished by fine or imprisonment fixed by Congress, or by penalties fixed by Congress, or measured by the injury done.’’ ‘«* * * But in making these regulations the officers did not legislate. They did not go outside of the circle of that which the act itself had affirmatively re- quired to be done, or treated as unlawful if done. But confining themselves within the field covered by the statute, they could adopt regulations of the na- ture they had thus been generally authorized to make, in order to administer the law and carry the statute into effect.’’ U. S. v. Grimaud, 220 U. S., 506 (517-8). ‘‘We see no difficulty in vesting in some body of men, presumed to be acquainted with the business and its conditions, the power to grant permits in special cases. * * * The authority to delegate that discretion to a board appointed for that purpose is sustained by the great weight of authority. (Citing cases), and by this court the delegation of such power even to a single individual is sustained in Wilson v. Eureka ¢ os ieliamachaeiaa acca 13 City, 173 U. S., 32, and Gundling v. Chicago, 177 U. S., 183. Fischer v. St. Lowis, 194 U. S., 361 (372). ‘*Tt is not too much to say that a denial to Congress of the right under the constitution to delegate the power to determine some fact or the state of things | upon which the enforcement of its enactment depends, would be to ‘stop the wheels of the government’ and bring about confusion, if not paralysis in the con- duct of public business.’’ American Bridge Co. v. U. S., 204 U. S., 364 (387). Respectfully submitted, Epwarp S. Crakk, Counsel for Plaintiff in Error. a LER LG DE PIE SINT YAEL ILE REIL I BRE Iuthe Supreme Gourt of the Anited States. OcToBeR TERM, 1916. First NATIONAL Bank oF Bay Cry, ) plaintiff in error, v. GRANT FELLOWS, ATTORNEY GENERAL of the State of Michigan, on the rela- tion of Union Trust Co. et al. J >No. 794. IN ERROR TO THE SUPREME CUURT OF THE STATE OF MICHIGAN. SUPPLEMENTAL MEMORANDUM FOR THE UNITED STATES AS AMICUS CURIAE. The following memorandum of State legislation since the passage of the Federal Reserve Act is sub- mitted in accordance with leave obtained in the course of the oral argument. JouHN W. Davis, Solicitor General. JosePH P. Corron, Mitton C. ELuiort, Counsel. Marcu, 1917. 88362—17 I. STATUTES AUTHORIZING NATIONAL BANKS TO DO TRUST COMPANY BUSINESS. COLORADO, Laws 1915, ch. 48, p. 185-7, ‘“An Act relating to banks and bankers,” approved April 12, 1915, provides: Sec. 7. Every National Bank, now or here- after carrying on business in this state, when authorized by special permit granted by the Federal Reserve Board, in conformity with the provisions of an Act of Congress approved December 23, 1913, and known as the “Fed- eral Reserve Act,’ shall possess, enjoy and exercise the following rights, privileges and powers and be authorized to act in the capaci- ties of trustee, executor, administrator and registrar of stocks and bonds, and in such other fiduciary or trust capacities as may now or hereafter be permitted by the laws of the United States or by the rules or regulations of said Federal Reserve Board. INDIANA, Laws 1915, ch. 97, p. 310, “An Act granting fiduciary powers to duly organized banks,” approved Mar. 8, 1915, provides: That every person, firm or corporation transacting a banking business subject to the provisions of an act entitled, ‘‘An act to regu- late and supervise the business of banking by individuals, partnerships or unincorporated persons,” approved March 8, 1907; and every (2) 3 corporation transacting a banking business as prescribed in, ‘An act to authorize and regu- late the incorporation of banks of discount and deposit in the State of Indiana,” approved Feb. 7, 1873, and all acts amendatory or supplemental thereto, and every national bank coming within the United States federal reserve act shall be empowered by this act to accept and execute trusts of any and every description which may be committed or trans- ferred to them, under the same rules and regu- lations as now govern like powers in loan and trust companies. * * * IOWA, Supplemental Supplement, Code, 1915, ch. 12—A, “Of additional powers conferred upon Trust Companies, State and Savings Banks,” section 1889-d, par. 9, p. 150, provides: When so authorized by any law of the United States now in force or hereafter enacted, national banks may exercise the same powers and perform the same duties as are by this section conferred upon trust com- panies, state and savings banks. Power to act as executor, administrator, trustee and registrar is conferred by paragraphs 1, 2, 3, 4, 5, 6 of sec. 1889-d upon ‘trust companies, state and savings banks.” MASSACHUSETTS, ch. 233, Acts 1915, p. 228, ‘An Act relative to the taxation of National Banks,” approved May 8, 1915, provides: Section 1. Every national bank located in this commonwealth which now is or hereafter Bas INV cD A AT BRE + may be empowered to act as trustee and in such capacity to hold personal property shall, annually, between the first and tenth days of April, make a return to the tax commissioner, signed and sworn to by some officer of the bank, of all personal property held upon any trust on the first day of April, whether such property is held by said bank singly or jointly with others, which would be liable to taxation if held by any other trustee residing in this commonwealth, the name of each city and § town in this commonwealth where any bene- ‘ ficiaries resided on said day, the aggregate ; amount of such property then held for all the i beneficiaries resident in each of such places, 2 and also the aggregate amount held for bene- 5) ficiaries not resident in this commonwealth. Every such bank shall annually pay to the : treasurer and receiver general a tax to be assessed by the tax commissioner upon the total value of such personal property held in trust at the rate determined by him under the provisions of section six of chapter one hun- dred and ninety-eight of the acts of the year nineteen hundred and fourteen. OHIO, Laws 1914, “An Act To grant additional powers to banking corporations organized under the laws of Ohio and to amend section 9764 of the General Code,” p. 185-6, section 9796-3, approved Feb. 17, 1914: No state bank or national bank shall act as administrator, executor, trustee or registrar of stocks and bonds in this state. Provided, however, that trust companies organized under ears. a 4) the laws of Ohio shall have the same powers in the acceptance and execution of trusts which are now conferred upon them by law, and other state banks and national banks may have the same powers in the acceptance and execution of trusts which are now conferred by law upon trust companies, upon such state banks and national banks complying with all the requirements, regulations, and conditions imposed by the laws of Ohio upon trust com- panies in the matter of the acceptance and execution of trusts. SOUTH DAKOTA, Laws 1915, ch. 105, p. 224, “An Act relating to National and State Banks to act as trustee, executor or administrator of stocks and bonds,” approved March 6. 1915: It shall be lawful for National banks when authorized by the laws of the United States to act as trustee, executor or administrator of estates or trusts or as registrar of stocks and bonds. Provided, further that State banks may act in similar capacity under such rules and restrictions as the Department of Banking and Finance may prescribe. VERMONT, Laws 1915, ch. 157, p. 259, “ An Act to authorize the appointment of National banks to positions of trust,”’ approved April 2, 1915: Section 1. To the extent that the laws of the United States permit, any national bank located and doing business in this state may be appointed and act as executor of a will, codicil or writing testamentary, as administrator with will annexed, as administrator of a person 6 deceased, as receiver, as assignee, trustee or guardian of a person subject to guardianship, under the same circumstances, in the same manner and subject to the same control by the court having jurisdiction, as a natural person legally qualified. VIRGINIA, Laws 1915, ch. 29, p. 52, “An Act to extend to national banks the rights, powers, privileges, and immunities conferred upon trust companies under an act entitled an act to provide how trust companies may be incor- porated, and to provide for general powers for the purpose of doing a trust business in this State, in addition to a general banking busi- ness,” approved February 10, 1915: 1. Be it enacted by the general assembly of Virginia, That all national banks which have been, or hereafter may be, permitted by law to act as trustee and in other fiduciary capaci- ties, shall have all the rights, powers, privi-~ leges and immunities conferred upon trust companies by an act of the general assembly of Virginia, entitled an act to provide how trust companies may be incorporated, and to provide for-general powers for the purpose of 4 4 doing a trust business in this State in addition | to a general banking business. Fs : WASHINGTON, Laws 1915, ch. 38, p. 131, “ An Act 3 relating to trust companies, national banks, 2 state banks, amending section 3346 of Reming- ton & Ballinger’s Annotated Codes and Stat- utes of Washington,” approved March 6, 1915: * * * Provided, That national banks, having a paid up capital of $50,000, or more LRA CANA ee cee 1 A at I RINE os HT 7 when authorized or permitted so to do by or under any act of the Congress of the United States, may exercise any of the powers con- ferred upon trust companies organized under this act: And provided further, That an y state bank organized under the laws of the State of Washington, having a paid up capital of fifty thousand ($50,000) dollars or more may exercise any of the powers conferred upon trust companies organized under this act by first obtaining permission from the state bank examiner. * * * II. BP SOS RARE dh oe Ba RG tytn a Pas ta Seon STATUTES WHICH MAY BE HELD TO LIMIT EITHER EX- PRESSLY OR BY POSSIBLE IMPLICATION THE POWER OF NATIONAL BANKS TO CARRY ON TRUST COMPANY BUSINESS. CALIFORNIA, Henning’s General Laws, vol. 5, 1914. Art. I, sec. 6 (p. 238), “ Banks and Banking,”’ provides: The term “trust company,” when used in this act, means any corporation which is in- corporated under the laws of this state for the purpose of conducting the business of acting as executor, administrator, guardian of estates, assignee, receiver, depositary, or trustee under appointment of any court or by authority of any law of this state, or as trustee for any pur- pose permitted by law. Art. IV, sec. 90 (bottom p. 272): * * * No foreign corporation shall have or exercise in this state the power to act as trustee under any mortgage, deed of trust, te a YT aaa ap, 3 ERS RTE ns om ct BERR ip GEL 8 or other instrument securing notes or bonds issued by any corporation * * *, DELAWARE, Revised Code of 1915, Ch. 20, “In- surance Department,”’ sec. 70, p. 307, provides: Any court, judge, or officer authorized by law to appoint any person or corporation to any office of trust, may, in its or his discretion, appoint to such office any trust company in- corporated under the laws of this State, and having its principal office or place of business in this State, provided the said court, judge, or officer shall be satisfied that the capital stock of such corporation shall have been fully paid in cash, and that such corporation is authorized by its charter to perform the duties of said office. (This provision was originally enacted as Act of March 28, 1908, Laws of 1901-1903, vol. 22, ch. 388, sec. 1, p. 749.) MAINE, Revised Statutes, 1916, under ch. 52, sec. 84, p. 833, entitled “Savings Banks, Trust and Banking Companies, Loan and Building Associations, Foreign Investment Corpora- tions,” sub-title “Trust and Banking Com- panies,” provides: No trust or banking company, association, or institution, iteorporated under the laws of this state, or of any other state and doing business in this state, shall act or do business as administrator or guardian, anything in their charter to the contrary notwithstanding. (This section was originally enacted as Act of March 13, 1889, Laws of 1889, ch. 312, p. 275.) 9 NEW HAMPSHIRE, Laws of 1915, ch. 109, sec. 34, p. 126, entitled “An act to provide for the in- corporation and management of trust com- panies and similar corporations,” approved Apr. 8, 1915, provides: No trust company, loan and trust company, loan and banking company, bank or banking company, or similar corporation, shall here- after be appointed administrator of an estate, executor under a will, or guardian or con- servator of the person or property of another. : (Sec. 15, p. 122, empowers such corporations d to act as trustee, and sec. 16, to act as regis- : trar.) a : NEW YORK, Laws of 1914, ch. 369, “An Act in re- : lation to banking corporations, and_ indi- : viduals, partnerships, unincorporated asso- ciations and corporations under the super- vision of the banking department, constituting chapter two of the consolidated laws,” Article V, sec. 223, p. 1371, approved Apr. 16, 19:4, provides: No corporation other than a trust company organized under the laws of this state shall have or exercise in this state the power to ' receive deposits of money, securities or other , personal property from any person or cor- : poration in trust, or have or exercise in this state any of the powers specified in subdivisions one, four, five, six, seven and eight of section one hundred eighty-five of this article, nor have or maintain an office in this state for the transaction of, or transact, directly or indi- rectly, any such or similar business, except oth es iis te oe eos a a i 10 that a federal reserve bank may exercise the powers conferred by subdivision one of such section if authorized so to do by the laws of the United States and any domestic corpora- tion legally exercising any of the powers con- ferred by such subdivision at the time this act takes effect may continue to exercise such powers * * *. Subdivisions one, four, five, six, seven, and eight of section 185 of Article Five, relating to trust companies, are as follows: 4 Sed x Wy 1. To act as the fiscal or transfer agent of the United States, of any State, municipality, body politic or corporation; and in such capacity to receive and disburse money, to transfer, regis- ter and countersign certificates of stock, bonds or other evidences of indebtedness, and to act as attorney in fact or agent of any person or corporation, foreign or domestic, for any law- ful purpose. 4. To act as trustee under any mortgage or bonds issued by any municipality, body politic or corporation, foreign or domestic, and accept and execute any other municipal or corporate . trust not prohibited by the laws of this State. 5. To accept trusts from and execute trusts for married women, in respect to their separate property, and to be their agent in the manage- ment of such property or to transact any business in relation thereto. 6. To act under the order or appointment of any court of competent jurisdiction as guardian, receiver or trustee of the estate of any minor, and as depositary of any moneys ind Sid Ue AS Bch sa Ne EIS 11 paid into court, whether for the benefit of any such minor or other person, corporation, or party, and in any other fiduciary capacity. To be appointed and to act under the order or appointment of any court of competent jurisdiction as trustee, guardian, receiver, or committee of the estate of a lunatic, idiot. person of unsound mind or habitual drunkard, or as receiver or committee of the property or estate of any person in insolvency or bank- ruptcy proceedings; to be appointed and_ to accept the appointment of executor of or trustee under the last will and testament, or administrator with or without the will annexed of the estate of any deceased person. 7. To take, accept, and execute any and all such legal trusts, duties, and powers in regard to the holding. management and disposition of any estate, real or personal, wherever located and the rents and profits thereof, or the sale thereof, as may be granted or confided to it by any court of competent jurisdiction, or by any person, corporation, municipality or other wuthority and it shall be accountable to all parties in interest for the faithful discharge of every such trust. duty or power which it may so accept. 8. To take, accept and execute any and all such trusts and powers of whatever nature or description as may be conferred upon or en- trusted or committed to it by any person or persons, or any body politic, corporation, do- mestic or foreign, or other authority by grant, assignment, transfer, devise, bequest or other- wise, or which may be entrusted or committed Sass REDS — sig _ ‘ - p a WLAMAREES WSS iz " “ INI EE ie PUR SI OTL EPR SIESTA AN SY LGED DP BAR its Bh Ap ~~? 1 ) | « | or transferred to it or vested in it by order of any court of competent jurisdiction, or any surrogate, and to receive, take, manage, hold and dispose of according to the terms of suth trust or power any property or estate, real or personal, which may be the subject of any such trust or power. Il. STATUTES EXPRESSLY AUTHORIZING TRUST COMPANIES, OR STATE BANKS EMPOWERED TO DO TRUST COMPANY BUSINESS, TO BECOME MEMBERS OF THE FEDERAL RESERVE SYSTEM. CALIFORNIA, Act of May 6, 1913 (Statutes & Amendments to the Codes, 1913, ch. 104, sec. 22, p. 149, in connection with sec. 56, p. 160), as amended by the Act of June 3, 1915 (Statutes & Amend- ments to the Codes, 1915. ch. 608, see. 56, p. 1112). DELAWARE, Act Mar. 8, 1915 (Laws 1914, ch. 107, sec. 18, p. 323.) GEORGIA, Act of August 18, 1915 (Georgia Laws, 1915, Title IV, p. 33). IDAHO, Act of March 11, 1915 (Session Laws, 1915, sec. 41a, p. 196). [OWA, Supplemental Supplement Code of Towa 1915, sec. 1889-0. KENTUCKY, Act of March 14, 1914 (Acts 1914 Kentucky, ch. 16, p. 61 et seq.) 13 LOUISIANA, Act July 9, 1914 (Laws 1914, ch. 305, sec. 1, 2, p. 631). MAINE, Act of March 31, 1915 (Laws of Maine, 1915, ch. 262, pp. 233-234). MASSACHUSETTS, Act of May 19, 1914 (Acts 1914, ch. 587, p. 472). MINNESOTA, Act of March 6, 1915 (Laws of 1915, ch. 28, p. 36). MISSISSIPPI, Act of March 9. 1914 (Laws of Mis- sissippi, 1914, ch. 124, sec. 64, p. 139). MISSOURI, Act of March 25, 1915 (Laws, Mis- souri, 1915, Art. III, see. 127, p. 167). MONTANA, Act of March 6, 1915 (Laws of Mon- tana, 1915, ch. 89, sec. 23, p. 130). NEW JERSEY, Act of Apr. 14 (Laws of 1914, ch. 159, p. 293). NEW MEXICO, Act of March 15, 1915 (Laws of 1915, ch. 67, sec. 96, p. 105). NEW YORK, Act of April 16, 1914 (Laws of New York, 1914, vol. 2, ch. 369, see. 185, sub-div. 12, p. 1344). NEBRASKA, Act of April 12, 1915 (Laws of 1915, ch. 175, p. 359). NEVADA, Act of February 26, 1915 (Laws of 1915, ch. 31, p. 32). NORTH DAKOTA, Act of February 10, 1915 (Laws of 1915, ch. 54, p. 61). We eae ee REGAL nef LO: , di ; 14 OHIO, Act of February 17, 1914 (Laws of Ohio, 1914, House Bill No. 5, pp. 185-186). OREGON, Act of February 24, 1915 (Laws of 1915, ch. 285, sec. 2, par. 9, p. 427). SOUTH CAROLINA, Act of February 18, 1914 (Laws of 1914, ch. 333, p. 588). UTAH, Act of March 15, 1915 (Laws of Utah, 1915, ch. 47, see. 1, p. 53). 3 ‘ + VIRGINIA, Act of March 2, 1914 (Acts of Assembly, 1914, ch. 27, pp. 42-48). WASHINGTON, Act of March 6, 1915 (Laws of Washington, 1915, ch. 35, see. 5, p. 128). SEE ARL A BE PEE GE ES IV. IN ADDITION TO THE STATUTES WHICH CONFER BOTH CLASSES OF POWERS UPON THE SAME CORPORATION, CITED ON PAGES 28 TO 31 OF THE BRIEF FOR THE UNITED STATES AS AMICUS CURIAE, SEE: COLORADO, Laws of 1915, ch. 48, approved April 12, 1915, p. 135-6, “‘An Act relating to banking,” secs. 1 and 2. MASSACHUSETTS, Acts of 1914, sec. 3, ch. 537, p. 473, “An Act relative to Trust Companies.”’ MISSOURI, Laws of 1915, p. 102, Art. 1, “State Banking Department,” ‘‘An Act to repeal articles I, II and III of chapter 12 of the Revised Statutes of 1909, relating respectively to “State banking department,” “banks of deposit and discount,” and “trust companies” * * * and to enact in lieu of all thereof new articles entitled respectively 15 ‘state banking department,” “ Banks”’ and “ trust companies,’ to be designated respectively as articles I, II and III of said chapter 12, with an emergency clause. Article III, “Trust Com- panies,”’ sec. 127 (pp. 165-167). OREGON, Laws of 1915, ch. 285, p. 427, ‘‘An act to amend sections 4559 ete. * * * pertaining to banks and bankers, and repealing all Acts and parts of Acts in conflict with the provisions of this Act.” VIRGINIA, ch. 486, p. 817, Laws of 1916, act ap- proved March 22, 1916, provides “how trust com- panies may be incorporated, and to provide for general powers for the purpose of doing a trust business in this State in addition to a general banking business.” WYOMING, Laws of 1915, ch. 93, p. 104, “An Act permitting State Banks, Saving Banks and Loan and Trust Companies to act generally as agent, attorney, trustee, executor, administrator or guar- dian.”’ O --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386003_0398%3A2. Public record. Not legal advice.