Page images
PDF
EPUB

coming a stockholder of such Federal reserve bank; but no such State bank may retain or acquire stock in a Federal reserve bank except upon relinquishment of any branch or branches established after the date of the approval of this Act beyond the limits of the city, town, or village in which the parent bank is situated."

The answers to your questions are found in the construction to be given to the second paragraph of the abovequoted section. If that section has no relation to the establishment of branches in foreign countries by member banks, as contended by attorneys for the applying bank, then the request of the applicant may be granted. However, if the statute means what its language would ordinarily imply, then such State member bank may not now establish a branch, or acquire a branch or branches, established subsequent to February 25, 1927, beyond the limits of the city or town in which the parent bank is situated, and at the same time retain its stock in the Federal reserve bank.

Where the language of a statute is clear and unambiguous, it is the duty of a court to expound the statute as it stands, even if the consequence works a hardship or injustice. United States v. Alger, 152 U. S. 384, 397; Hamilton v. Rathbone, 175 U. S. 414, 421.

In Lake County v. Rollins, 130 U. S. 662, 670, the Court said:

[ocr errors]

where a law is expressed in plain and unambiguous terms, whether those terms are general or limited, the legislature should be intended to mean what they have plainly expressed, and consequently no room is left for construction."

As stated by Mr. Justice Day, speaking for the court, in Adams Express Co. v. Kentucky, 238 U. S. 190, 199:

"It is elementary that the first resort, with a view to ascertaining the meaning of a statute, is to the language used. If that is plain there is an end to construction and the statute is to be taken to mean what it says."

The language of the second paragraph of section 9 of the Federal Reserve Act, as amended, supra, is plain and unambiguous, and under accepted rules of statutory construction it must be taken to mean what it says, that is,

to restrict State member banks in the establishment of branches to the limits of the city, town, or village in which the parent bank is situated.

Section 7 of the McFadden Banking Act amending section 5155 of the Revised Statutes, relating to branches of national banks, contained the following:

"(f) The term 'branch' as used in this section shall be held to include any branch bank, branch office, branch agency, additional office, or any branch place of business located in any State or Territory of the United States or in the District of Columbia at which deposits are received, or checks paid, or money lent." (44 Stat. 1229.)

It has been contended that this section shows that in dealing with branch banks Congress had in mind only branches or places within the United States, but the underlying words show that the subdivision only dealt with the word "branch" as used in that section and not

elsewhere.

as used

It is apparent also from the terms of the Act of February 25, 1927, supra, that Congress did consider the question of the establishment of foreign branches because section 7 (g) of that Act provides:

"This section shall not be construed to amend or repeal section 25 of the Federal Reserve Act, as amended, authorizing the establishment by national banking associations of branches in foreign countries, or dependencies, or insular possessions of the United States."

Congress made no such specific exception in respect to State member banks.

Section 9 of bill H. R. 2, 69th Congress, 1st session, known as the McFadden bill, which subsequently became the Act of February 25, 1927, as it passed the House of Representatives, contained an additional paragraph defining the term "branch or branches " as not including "any branch established in a foreign country or dependency or insular possession of the United States." This paragraph was stricken from the bill by the Senate Committee on Banking and Currency and the statute as finally enacted contained only the above-quoted exception respecting national banks. The rejection by Congress of a specific provi

sion contained in the Act as originally reported suggests that the Act should not be so construed as in effect to include that provision. Pennsylvania R. R. Co. v. International Coal Mining Co., 230 U. S. 184, 198.

In your second question you request to be advised whether a State member bank may acquire a branch established in a foreign country since February 25, 1927, by consolidating with a State bank which has absorbed or taken over a liquidating national bank having such foreign branch. To answer that question in the affirmative would be to hold that a State member bank may do indirectly that which it may not do directly. Section 9 of the Federal Reserve Act prohibits such bank from acquiring or retaining stock in a Federal reserve bank if it should establish or acquire a foreign branch which has been established subsequent to the date of said Act. It is immaterial how the foreign branch is acquired. To acquire one by acquiring the assets of a national bank with a foreign branch is as much within the ban of the statute as if any other method of acquisition were used.

It has also been urged that Congress could not have intended to discriminate against State member banks by denying them what is allowed to national banks, and that no reason for such discrimination is apparent.

Section 25 of the Federal Reserve Act places limitations and conditions on the right of national banks to establish foreign branches, and to have allowed State member banks to establish foreign branches, subject only to the provisions of State laws under which they are organized, might have seemed to Congress objectionable. But, however that may be, the words of the statute are explicit, and if any oversight or mistake occurred in framing it, Congress must be looked to for amendment. We can not disregard its plain provisions.

I have the honor to advise you, therefore, that both of your questions must be answered in the negative.

Respectfully,

WILLIAM D. MITCHELL.

To the SECRETARY OF THE TREASURY.

PHILIPPINE ISLANDS-LEGALITY OF BOND ISSUE

The proposed issue by the Government of the Philippine Islands of bonds of the face value of $1,500,000, the proceeds from the sale of which are to be used in the purchase of an equivalent amount of bonds of the Metropolitan Water District, being authorized by Act No. 3255 of the Philippine Legislature of December 3, 1925, and being within the limit of indebtedness authorized by Congress, and all statutory requirements regarding the issue of the bonds having been complied with, and the form of the bond submitted being in substantial compliance with the law authorizing the issue, said bonds, when issued in the form and amount proposed, will have been legally issued and will be valid and binding obligations of the Government of the Philippine Islands.

DEPARTMENT OF JUSTICE,
October 4, 1929.

SIR: I have the honor to acknowledge receipt of your letter of August 14, 1929, requesting my opinion on the legality of the proposed issue, by the Government of the Philippine Islands, of bonds of the face value of $1,500,000, the proceeds from the sale of which are to be used in the purchase of an equivalent amount of bonds of the Metropolitan Water District, a public corporation created by Act of the Philippine Legislature No. 2832, approved March 6, 1919. By said Act the Metropolitan Water District is created for the purpose of supplying water and sewerage service to the inhabitants of said district, and is given authority to incur indebtedness and issue bonds, the payment of which is guaranteed by the Government of the Philippine Islands.

You state that the proposed bonds of the Philippine Government are to be issued in compliance with the request of the Governor General of the Philippine Islands, upon the recommendation of the Secretary of Finance and pursuant to authority contained in Act No. 3255 of the Philippine Legislature, approved December 3, 1925, and section 11 of the Act of Congress approved August 29, 1916 (c. 416, 39 Stat. 548), as amended by Act of May 31, 1922 (c. 203, 42 Stat. 599). Section 1 of Act No. 3255 provides in part: "The Secretary of War is hereby authorized to issue in the name and behalf of the Government of the Philippine Islands bonds in the amount of another three million dollars

the proceeds of the sale of which shall be used by said Government for the purchase of an equivalent par amount of bonds of the Metropolitan Water District to be issued for the purpose of obtaining funds for the completion of the extension of the water supply and sewerage systems of said district.

"The bonds so authorized to be issued shall bear such date and be in such form as the Secretary of War may determine and shall bear such rate of interest and run for such length of time as may be determined by said official. Both principal and interest shall be payable in gold coin of the United States at the Treasury of the United States and the interest shall be payable at such periods as the Secretary of War may determine. Said bonds shall be issued at times and in amounts to be determined by the Governor General upon the recommendation of the Secretary of Finance, and they may be coupon bonds or registered bonds, convertible, in the discretion of the Secretary of War, into either form, and in the case of the issue or transfer of any registered bonds the same shall be registered in the Treasury of the United States. These bonds may be issued in series bearing different dates."

Section 3 of the Act provides that the proceeds of the sale of said bonds are appropriated for the purpose of pur chasing bonds issued by the Metropolitan Water District. Section 4 creates a sinking fund for the payment of the bonds at maturity, and section 5 makes a permanent annual appropriation out of the general funds in the Treasury of the Philippine Islands of such sums as may be necessary to provide for the sinking fund created by section 4 and for the payment of the interest on the bonds issued pursuant to said Act as the same become due.

Section 11 of the Act of August 29, 1916, as amended by Act of May 31, 1922, supra, provides:

66* * * where necessary to anticipate taxes and revenues, bonds and other obligations may be issued by the Philippine Government or any provincial or municipal government therein, as may be provided by law and to protect the public credit: Provided, however, That the entire indebtedness of the Philippine Government created by the authority conferred herein, exclusive of those obligations

« PreviousContinue »