me that the natural meaning of this section is that the general banking business of a national bank must be conducted in one office or banking house, within the place designated in its organization certificate.

But little light is thrown upon the meaning of this section by the decisions of the courts. In Merchants' Bank v. State Bank, 10 Wall. 604, 650, it was insisted that the certification of checks by a cashier at another place than his banking house was, under this section, void; but the court held to the contrary, saying:

"It is objected that the checks were not certified by the cashier at his banking-house. The provision of the act of Congress as to the place of business of the banks created under it must be construed reasonably. The business of every bank, away from its office frequently large and important is unavoidably done at the proper place by the cashier in person, or by correspondence or other agents. In the case before us, the gold must necessarily have been bought, if at all, at the buying or the selling bank, or at some third locality. The power to pay was vital to the power to buy, and inseparable from it. There is no force in this objection."

This decision is but in line with Bank of Augusta v. Earle and other cases in which it was held that a bank may transact a particular class of business outside its banking house.

In Armstrong v. Second National Bank of Springfield, 38 Fed. 883, 886, one question was whether or not a national bank could enter into a general arrangement with a bank at another point to cash its checks, and Judge Sage upon this point said:

"If, now, we turn to section 5190, of the United States Revised Statutes, we find it enacted 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.' Under this section it certainly would not be competent for a national bank to provide for the cashing of checks upon it at any other place than at its office or banking house."

There is some doubt whether this holding of the learned judge is in accord with the cases above cited which uphold the power of a bank to maintain an agency.

In neither of these cases was the bearing of this section upon the power to establish branch banks before the court or given any consideration. Hence, so far as the courts are concerned, the precise meaning of this section is an open one; but I think the construction above given the most natural and reasonable.

Section 5138, Revised Statutes, also has an important bearing upon this question. There it is provided that the minimum capital stock of a bank in a place containing from 3,000 to 6,000 inhabitants shall be not less than $50,000; in a place from 6,000 to 50,000 inhabitants, not less than $100,000; and in all larger places the capital shall be not less than $200,000.

In a branch bank bills of exchange are negotiated and discounted; moneys received for deposit; exchange, coin, and bullion are bought and sold; money is loaned, and every kind of banking business that is authorized is there transacted, unless it be the issuing and circulating of bank notes. In proportion to the amount of business transacted, the same capital is required to run the branch bank as to operate the parent bank. In the city of Atlanta no national bank can be organized for a less capital than $200,000; and if a national bank in that city, having a capital stock of $200,000, should establish a branch bank therein, the practical result would be that two banks would be in operation on a capital upon which only one bank is authorized to do business in that city; and each additional branch would, of course, constitute a further division of the capital in violation of the spirit of this section of the statute.

He

Furthermore, I have carefully examined the national banking laws, and I fail to find any provision which empowers the comptroller to restrain or to regulate in any manner the conduct of a national bank with reference to the establishment and maintenance of branch banks. is authorized and directed to approve of the name assumed by the association (sec. 5134, Rev. Stat., par. 1); when notified that 50 per cent of the capital stock has been paid in, and the laws have otherwise been complied with, he is required to examine into the condition of the association, the name and place of residence of its directors, the amount

of capital stock of which each is the owner in good faith, and whether such association has complied with all the provisions of the act, and shall cause a proper statement to be attested by oath of a majority of its directors and the president and cashier; and, if after such examination it appears that the association is lawfully entitled to commence the business of banking, it is his duty to issue a proper certificate to that effect (secs. 5168 and 5169, Rev. Stats.); he is required to approve the increase of capital stock (act of May 1, 1886 sec. 1; sec. 5142, Rev. Stat.), and also the decrease of the capital stock (sec. 5143, Rev. Stat.); he can, at his discretion, extend the corporate existence of the association (act of July 12, 1882, sec. 9; 22 Stat. 162); he must approve reserve agents of the association (secs. 5192 and 5195, Rev. Stat.); he is required to give notice to an association that is short in reserve funds (sec. 5192, Rev. Stat.); he must approve the change of name and location of a bank (act of May 1, 1886, sec. 2; 24 Stat. 18), and shall also approve of the conversion of State banks into national banks (sec. 5154, Rev. Stat.); but there is no provision directing or authorizing him to exercise any power whatever with reference to the location of a branch bank or the terms and conditions upon which such a branch may be established and maintained.

Can it be supposed that if Congress intended to authorize the establishment of branches by national banks no restraint whatever would have been thrown around the exercise of such power, and that the comptroller, who in all other respects is given such ample power of control over the existence and conduct of banks, would not have been vested with some power or control over the location of such branches and the manner in which the same should be established and conducted?

If, under the laws as they now exist, a national bank has the power to establish a branch, the exercise of that power is entirely within the discretion of the board of directors of the association, and it may be exercised without any restraint whatever; and the Lowry National Bank can

establish not only one branch in the city of Atlanta, but any number of branches, without consultation with the comptroller with reference thereto. Such an unrestrained power, it appears to me, would be fraught with the most serious danger and would result in an inflation of banking business upon insufficient capital, and in an inadequate means of supervision and control over a bank's business by the chief officials in authority, which, in all probability, would bring disaster to the welfare and reputation of the national banking system.

It is quite probable that some national banks, under peculiar circumstances, should be permitted to establish branches, but this should not be done except under the supervision and direction of the comptroller, who should possess the authority to make careful investigation of all the conditions and exercise his judgment as to whether the establishment of such branch should be permitted and to prescribe proper regulations by which it should be conducted.

It is needless to say that such a power can be granted only by Congress, and can not be vested in the comptroller by a mere construction of the statute, when the statute contains no clause which will warrant such a construction.

Finally, the construction heretofore placed upon the banking laws, both by Congress and your department has been uniformly in accordance with the view that a national bank has not the power to establish a branch bank.

By section 7 of the act of March 3, 1865, chapter 78 (13 Stat. 484; sec. 5155, Revised Statutes), it is provided that

"It shall be lawful for any bank or banking association organized under State laws, and having branches, the capital being joint and assigned to and used by the mother bank and branches in definite proportions, to become a national banking association in conformity with existing laws, and to retain and keep in operation its branches, or such one or more of them as it may elect to retain; the amount of the circulation redeemable at the mother bank, and each branch, to be regulated by the amount of capital assigned to and used by each."

If the power existed for national banks to have branches, there was no necessity for this express provision allowing State banks, when converted, to retain their branches; and, moreover, the limitation of this power to such banks as had their capital assigned to the mother and branch banks in definite proportions, clearly shows that it was not supposed that such a power was possessed by banks in general.

By act of May 12, 1892 (27 Stat. 33), any national bank in Chicago designated by the World's Columbian Exposition was, upon approval be the comptroller, authorized to conduct a banking office upon the exposition grounds, the time within which such branch might be operated being restricted to two years; and a similar act was passed March 3, 1901 (31 Stat. 1444), with reference to the establishment by the banks of St. Louis of branches on the grounds of the Louisiana Purchase Exposition.

Of course the interpretation of statutes is a judicial function, and the courts may disregard the meaning ascribed to an act in subsequent legislation. But the construction of an act by Congress, especially by the Congress which enacted it, is always given much consideration; the general rule being thus stated in United States v. Freeman, 3 How. 556, 565:

"If it can be gathered from a subsequent statute in pari materia, what meaning the legislature attached to words of a former statute, they will amount to a legislative declaration of its meaning and will govern the construction of the first statute."

The officers of your department who have administered the banking laws have also given a like construction to this section. I have been unable to find any expression made by them with reference to this feature of the banking laws previous to August 10, 1889. On that date Solicitor Hepburn held, in an opinion rendered at the request of the comptroller, that under section 5190, Revised Statutes, a banking association had to transact its usual business in one office or banking house. That this construction has been uniformly followed and concurred in is shown by the "Instructions and suggestions of the Comptroller of

89760°-VOL 29-13-7