Applicability to Certain Classes of Institutions.

C. A., 200. Savings and loan associations.-A savings and loan association is a bank within the meaning of that part of section 8 of the Clayton Act which relates to interlocking bank directorates. 1916 Bulletin, p. 118.

C. A., 201. Mutual savings banks.-A mutual savings bank not having capital stock represented by shares comes within an exception to the prohibitions of the Clayton Act, and consequently a director of such bank may serve as a director of another bank. 1916 Bulletin, p. 394.

C. A., 202. A private banker comes within the prohibitions of the Clayton Antitrust Act, and the Kern amendment, approved May 15, 1916, does not permit the Federal Reserve Board to authorize a private banker to serve at the same time as an officer, director, or employee of two other banks, since the Kern amendment does not include private bankers. (By an act approved May 26, 1920, the term "private banker" has been inserted in the proviso of the Kern amendment.) 1916 Bulletin, p. 395. (See C. A., 206.)

C. A., 203. State banks doing business in the District of Columbia.A bank or trust company which is incorporated under the laws of a State, but which is doing business in the District of Columbia, subject to limitations and restrictions imposed by the acts of Congress, is subject to the provisions of section 8 of the Clayton Act which relate to banks organized or operating under the laws of the United States. 1916 Bulletin, 526. (See C. A., 100.)

C. A., 204. Private banker- What constitutes.-The term "private banker" includes partnerships or individuals who are engaged in the banking business, as that term is generally understood, including partnerships and individuals who solicit or receive deposits subject to check, who do a foreign-exchange, acceptance, loan, or discount business, or who purchase and sell and distribute issues of securities by which capital is furnished for business or public enterprises. Ordinary stock or note brokers are not included, unless a substantial part of their business consists in one or more of the above-described banking activities, nor are partnerships or individuals who use only their own funds included. 1916 Bulletin, p. 588.

C. A., 205. A Morris Plan Bank is a bank within the meaning of section 8 of the Clayton Antitrust Act. 1917 Bulletin, p. 527.

C. A., 206. Private bankers.-A private banker may, with the permission of the Federal Reserve Board, serve as a director or officer of not more than two national banks which are not in substantial competition with the private banker or with each other. 1920 Bulletin, p. 948.

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Meaning of Substantial Competition.

C. A., 300. Where a State bank or trust company and a national bank are engaged in granting commercial credits or receiving and soliciting commercial deposit accounts in the same general territory, the two banks should be deemed to be in substantial competition; the mere fact, however, that the two institutions purchase acceptances or first-class commercial paper in the open market does not necessarily make them in substantial competition. (See Regulation L, series of 1923, at p. 159, for a more complete statement as to the meaning of substantial competition.) 1917 Bulletin, p. 878.

Cumulative Effect of Provisos.

C. A., 400. According to the usual principles of construction, & proviso takes out of the operation of the body of the enactment that which otherwise would be within it. Therefore an officer, director, or employee of a member bank, who would otherwise come within the prohibitory language of the Clayton Act, may serve as a director, officer, or employee of one other bank where the entire capital stock of one is owned by stockholders in the other and at the same time, under the Kern amendment, may, with the consent of the Federal Reserve Board, serve as an officer, director, or employee of not more than two other banks which are not in substantial competition with the member bank. 1916 Bulletin, p. 396. 1916 Bulletin, p. 396. (See C. A., 100.)

Provisions for Enforcement.

C. A., 500. Section 8 of the Clayton Antitrust Act does not contain any penalty for noncompliance with its provisions. Section 11 of that act, however, authorizes the board, after hearing, to order the person complained of to desist from further violations and to resign the directorships held contrary to law, and upon the failure of the person to obey such an order the board may apply to the United States Circuit Court of Appeals for its enforcement. However, the acts of a director of a member bank are valid even though he subsequently be adjudged disqualified to serve as such by the Circuit Court of Appeals; although acts subsequent to the decree would not merely be invalid but also in contempt of court. 1916 Bulletin, p. 606. (See also sec. 15, Clayton Act.)

Miscellaneous.

C. A., 600. Directors of State banks.-Section 8 of the Clayton Act prohibits a person who is a director of a State bank with resources aggregating more than $5,000,000 from serving at the same time as a director of any national bank. However, a person who is a director of a State bank with resources aggregating more than $5,000,000 is not prohibited from serving at the same time as officer or employee of a national bank unless both institutions are located in the same city of over 200,000 inhabitants. 1916 Bulletin, p. 224.

C. A., 601. Service as director and officer of nonmember bank and director and officer of national bank.—A person is a director and officer of a trust company with total resources of over $5,000,000 in a city of over 200,000 inhabitants. He desires to serve at the same time as director and officer of a national bank with total resources of under $2,000,000 located in a municipality of less than 20,000 inhabitants. Under the facts recited the same person can not serve as the director of both the national bank and of the trust company, but he may serve as a director and/or officer in one and as an officer only in the other. 1916 Bulletin, p. 329. (See also Regulation L, series 1923.)

C. A., 602. Fiscal year.-The term "fiscal year" as used in paragraph 1 of section 8 of the Clayton Antitrust Act refers to the fiscal year of the institution in which the person in question is a director. There follows a general discussion of the provisions of the Clayton Act, much of which is no longer applicable in view of the opinion of the Attorney General (C. A., 100). 1916 Bulletin, p. 523.

C. A., 603. Member of executive committee.-A person ineligible under the provisions of section 8 of the Clayton Act to serve as a director may not properly serve as a member of the executive committee, for the prohibitions of the Clayton Act apply to directors, other officers, or employees, and a member of an executive committee would seem, in effect, to be an officer within the meaning of the Clayton Act. 1916 Bulletin, p. 672.

C. A., 604. Members of an advisory committee of a national bank are not necessarily officers, directors, or employees of such bank within the meaning of section 8 of the Clayton Act. They can not be directors unless elected by the shareholders, and whether they are officers or employees depends entirely upon the scope of the rights and duties assigned to them by the board of directors. 1917 Bulletin, p. 118.

C. A., 605. Banks located in suburban districts.—A bank located within the corporate limits of a city of more than 200,000 inhabitants comes within the prohibitions of the Clayton Act, even though it be located in a suburban district. 1919 Bulletin, p. 362. (See XIX, 303; XXIV, 301.)

NATIONAL BANK ACT.

SECTION 5136, R. S.

Corporate Powers of National Banks.

5136 R. S., 100. Guaranty of deposits by surety company. Although not expressly authorized to do so, a national bank may make a contract with a surety company whereby the latter guarantees the deposits, as this is a reasonable contract and a proper method of fulfilling the national bank's duty under the law. (Opinion of Attorney General.) 1915 Bulletin, p. 29.

5136 R. S., 101. Power of national banks to write insurance through its officers.-National banks have no express or implied power to write fire, cyclone, liability, or other kinds of insurance or to receive the profits of insurance contracts entered into by its officers. Bulletin, p. 73. (See XIII-G, 100.)

5136 R. S., 102. Authority of national bank to act as agent for another bank in acceptance transactions. In the board's opinion a national bank may properly act as agent for a trust company located in another State for the purpose of accepting drafts drawn on the trust company by the latter's customers, and accepted by the national bank solely for the account and in the name of the trust company. The national bank is not obligated on the instrument and is further safeguarded by an agreement of the trust company to put it in funds to meet acceptances payable at its office. The board believes that the business of accepting and paying drafts as agent for another bank may properly be considered incidental to a national bank's usual business of receiving and holding accounts and paying them out upon the customer's order. The Comptroller of the Currency concurs in the opinion. 1923 Bulletin, p. 300. (See 5190 R. S. 100.)

SECTION 5190, R. S.

Place of Business of National Banks.

5190 R. S., 100. Authority of national banks to appoint agents for purpose of accepting and paying drafts.-The Comptroller of the Currency has ruled that a national bank located in California is without authority to appoint an agent in New York to accept on behalf of the bank drafts drawn on it payable in New York and to pay such drafts out of funds deposited in New York under the agent's control. 1920 Bulletin, p. 835. (See XIII-E, 504; 5136 R. S. 102.)

5190 R. S., 101. Right of national banks to establish additional branch offices.-Opinion of the Attorney General and regulations of the Comptroller of the Currency with reference to the authority of national banks to open and operate offices at places other than their banking houses. The Attorney General is of the opinion (1) that national banks have power to open and operate offices at places other than their banking houses, within the city or town specified in their organization certificate, for the performance of such routine services as the receipt of deposits and the cashing of checks for their customers; (2) that national banks have no authority to open offices outside of the limits of the city or place designated in the organization certificate. The regulations of the Comptroller of the Currency set forth the conditions and procedure under which national banks may establish and operate such branch offices. 1923 Bulletin, p. 1196. (See N. B. A. 100.)

SECTION 5200, R. S.

Limitations on the Lending Power of National Banks.

5200 R. S., 100. State member banks are not subject to the provisions of section 5200. 1917 Bulletin, p. 879. (See IX, 500, 600, 604.)

5200 R. S., 101. The provisions of section 5200 analyzed and discussed in the form of a table showing the various exceptions to the 10 per cent limitation. 1919 Bulletin, p. 1055; 1922 Bulletin, p. 933. Limitations on Acceptance Power.

5200 R. S., 200. Acceptances as liabilities within the restrictions of section 5200.-The 10 per cent limitation imposed by section 5200 does not apply to the mere acceptance of a bill of exchange, but the provisions of that section do apply to the indebtedness arising between the drawer of the bill and the accepting bank in case the drawer fails to furnish funds with which to meet the acceptance at maturity. 1915 Bulletin, p. 269; 1916 Bulletin, p. 64; 1918 Bulletin, p. 197.

5200 R. S., 201. Qualified acceptances.-A bill of exchange drawn payable "at sight" and accepted payable in three months is a qualified or conditional acceptance and the maker and prior indorsers are released. The instrument in effect becomes the promissory note of the acceptor and therefore falls within the provisions of section 5200, rather than within the exceptions to that section, as it is not a bill of exchange drawn in good faith against actually existing value. 1916 Bulletin, p. 463. (See XIII-C, 813.)

5200 R. S., 202. (a) The limitations imposed by section 5202, Revised Statutes, on the aggregate liabilities incurred by any national bank do not apply to acceptances of such banks, since such liabilities are expressly excepted under the fifth exception, namely, liabilities incurred under the provisions of the Federal reserve act.

(b) A member bank legally may purchase its own acceptances, but if it does so, such a transaction is equivalent to a loan or advance to the customer for whom the acceptance was made, and the liability of such customer becomes subject to the limitations of section 5200, Revised Statutes. Where a member bank purchases its own acceptance, the payment operates as a mere purchase of the bill and not a payment of the debt. Consequently the acceptor in such case properly may reissue the instrument before maturity. (See also 1917 Bulletin, pp. 28, 691, 696(1).)

(c) The limitations imposed by section 5200 on the amount of money which may be borrowed by any individual from a member bank do not apply to acceptances of such bank, i. e., the customer procuring the acceptance has not borrowed money from the accepting bank but merely borrowed its credit. After maturity, however, the