by the officers of the bank, while a branch bank requires, in effect, a division of the capital, the working force is organized, and the business conducted as if it were a separate organization, and it competes in all branches of the banking business with other banks in that locality the same as if it were an independent institution.

That the authorities sustaining the validity of transactions by an agency do not apply to the establishment of a branch bank is further shown by the following authorities, wherein it is expressly declared that a bank can not establish a branch unless the power to do so is granted by its charter or the general laws relating to the subject in express language or by necessary implication.

In Morse on Banks and Banking, section 46, it is said: "Agencies for specific purposes, as for the redemption of bills or the dealing in bills of exchange, may be established in other places. In these cases, it is for the convenience of the public that such should be the case. But there is no case which holds that an agency for the exercise of the more important and valuable functions, such as issuing circulating paper or discounting notes, or an agency designed to carry on the general business of banking, would be regarded as legal, for such nominal establishment of agencies might easily result in the practical establishment of a network of branch banks throughout the home State or in other States."

In 1 Morawetz on Corporations, section 387, it is said:

"Banking corporations have implied authority to create agencies for special purposes, such as the redemption and purchase of bills of exchange and other securities, wherever this may be advantageous in carrying on their business; but they have no right to establish branch banks in the absence of express authority conferred by charter. When a banking corporation is created to do business at some particular place, it is implied that its banking house shall be established at that place only, and that its affairs shall be managed by a single set of officers, in the usual manner.” Magee on Banks and Banking, section 30, says: "The question of privilege in the establishment of a branch bank seems to be settled that a national bank has

no right to establish branch banks without special legislative authority. The ruling is upon the principle, no doubt, that the bank must have a location or place where all its business is to be transacted, and branches, especially if established outside of the city or town, and at a place other than the location of the mother bank, would lead to conflict as to where notes should be protested, and payments be made."

In Zane on Banks and Banking, section 24, it is said:

"If private banking is permitted, there is no reason, in the absence of legal prohibition, why a private bank should not have branches; but a corporation has only the powers granted it, and it can not establish branches unless the power to do so is granted to it."

In Morehead Banking Co. v. Tate, 122 N. C. 313, 316, the charter of the bank provided that "its principal place of business shall be at Durham, North Carolina," but did not, in express terms, permit the establishment of branch banks. However, the bank established a branch at Burlington, N. C., and the cashier at this branch executed a bond for the faithful performance of his duties, and the action was brought to recover for a breach of the bond. The court held that the defendant was not in a position to question the right of the bank to locate a branch at Burlington; but, in response to the contention that the expression in the charter that the "principal place of business shall be at Durham" by implication authorized the establishment of a branch bank or agency at another point, the court said: "This court would not be willing to sanction this practice of establishing branch banks or agencies to do a banking business unless they are expressly (italics the court's) authorized by legislative authority contained in the charter. And any bank without having this express grant, undertaking to establish such branch establishments, will lay itself liable to have its charter vacated."

In Bruner v. Citizens Bank of Shelbyville, 134 Ky. 283, 298, the power of a bank to establish a branch when not expressly authorized to do so by its charter was very fully and ably considered, and after enumerating many reasons why such authority should not be implied, unless such

implication necessarily arose from the language used, the court concluded its opinion as follows:

"Other reasons might be advanced against granting the powers contended for, but we consider these sufficient to support the conclusion we have reached that, in the absence of express legislative authority, the power to establish branch banks does not follow by implication as a reasonable or necessary incident to the right to do a banking business. This construction does not mean that banks may not have agents. There is a wide difference between the appointment of agents to receive and collect money and forward it to the bank or to transact other business necessary or incidental to banking and the right to establish branch banks at which a general banking business is carried on. A bank may have as many duly appointed agents as its needs require, and these agents, among other things, may receive and forward to it at its place of business the money of persons who desire to deposit with it. We believe that safe and conservative banking methods, the protection of the public, the security of depositors, and the interests of the stockholders all demand that banks shall have only one place at which 'to carry on the business of banking and discounting and negotiating notes, drafts, bills of exchange, and other evidences of debt, and purchasing bonds, receiving deposits, and allowing interest thereon, buying and selling exchange, coin, and bullion, and lending money on personal or real security.' And that to legalize by judicial construction a departure from this course would soon result in failure that would do infinite harm to the banking interest of the State and bring disaster to numbers of innocent people."

My attention has been called to no case or textbook wherein the principle has been stated with approval that a bank has the power to establish a branch for the carrying on of a general banking business, unless such power is granted either in its charter or by general statute in express language or by necessary implication; and, in view of the authorities above cited, it should be considered as settled that no such power otherwise exists.

With this principle in mind, let us examine the laws pertaining to the establishment and control of national

banks, and determine whether any such power is therein granted, either expressly or by implication.

The general powers granted to national banks are contained in section 5136, Revised Statutes, paragraphs 6 and 7. In paragraph 6 the association is given power to prescribe, by its board of directors, by-laws not inconsistent with law, regulating the manner in which its general business shall be conducted, and the privileges granted to it by law exercised and enjoyed; and by paragraph 7 it is empowered

"To exercise by its board of directors, or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking; by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin, and bullion; by loaning money on personal security, and by obtaining, issuing, and circulating notes according to the provisions of this Title.”

Clearly, neither of these provisions contain an express or necessarily implied power to establish a branch bank. The former relates to the adoption of by-laws by the board of directors prescribing the manner of conducting the business of the institution, while the latter confers the power to carry on the business of banking by the exercise of the particular powers enumerated therein. While these powers are designated as incidental, yet undoubtedly all powers are also granted which are reasonably necessary for the exercise of each and every one of these enumerated powers.

As said in First National Bank v. National Exchange Bank, 92 U. S. 122, 127, in referring to section 5136, Revised Statutes:

"Authority is thus given to transact such a banking business as is specified, and all incidental powers necessary to carry it on are granted. These powers are such as are required to meet all the legitimate demands of the authorized business, and to enable a bank to conduct its affairs, within the general scope of its charter, safely and prudently."

Yet the power to establish a branch bank is certainly in no respect essential to the discounting and negotiating of

promissory notes, drafts, bills of exchange, and other evidences of debt, or of exercising either or any of the incidental powers named in the statute, or of any power which is incident to the carrying on of a general banking business.

The only clauses which relate to the place where a bank may transact business are, first, in section 5134, Revised Statutes, where it is provided that the certificate of organization shall specify

"Second. The place where its operations of discount and deposit are to be carried on, designating the State, Territory, or district, and the particular county or city, town, or village."

And, second, section 5190, Revised Statutes, which provides that

"The usual business of each national banking association shall be transacted at an office or banking-house, located in the place specified in its organization certificate."

The first of these provisions does not expressly prohibit the carrying on of a general banking business outside of the place designated in the certificate; yet it is agreed that the clear implication therein is that the power of the bank to carry on such a business can not be exercised elsewhere than in such place; and there is certainly no implication or intimation in this clause that the association may establish an unlimited number of banks or branches within the designated place.

The arguments presented on behalf of the bank have been directed mainly to section 5190, but it has not been even suggested that there is anything in the language of this section which of itself can possibly be construed as an implication that a national bank has the power to establish a branch bank. The sole contention is that this section does not expressly prohibit the establishment of a branch.

It may be admitted that there is reasonable ground for this contention, and that if there were any provision elsewhere in the national banking laws which clearly implied that such authority existed, by a subtle process of reasoning this section could be construed to be consistent therewith. But in the absence of such language elsewhere in the act, and in view of the general principle that banks can not establish branches unless the power to do so is granted, it appears to