Branch Banks

A State which has a law against branch-banking may enforce it against a National Bank. The Supreme Court so ruled. Justice Sutherland wrote the decision: "The mere multiplication of places where the powers of a bank may be exercised is not, in our opinion, a necessary incident of a banking business. ... It is wholly illogical to say that a power which by fair construction of the statutes is found to be denied nevertheless exists as an incidental power."

Justice Van Devanter wrote a dissenting opinion in which Chief Justice Taft and Justice Butler concurred.

The case was brought by the First National Bank of St. Louis in an appeal from the Missouri courts.

Eighteen States--Arkansas, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Nebraska, North Dakota, New Mexico, Oklahoma, South Dakota, Utah, Washington, West Virginia, Wisconsin, and Wyoming--joined Missouri in asserting State control over national as well as State and private banks in matters of such vital importance as the establishment of branches.

The law of 1918 permitted national banks to absorb State banks with branches.

Hundreds of branch banks which thus came into being in States which permit them will probably not be affected by this decision. Also, the Attorney General and Comptroller of the Currency recently ruled that a national bank might open "teller's offices" in its own city.