superintendence of the Secretary, and the whole shall be printed and ready for delivery on or before the first day of December next after the close of the year to which the report relates.

See Act of February 18th, 1875, correcting Revised Statutes, page 97.

The reports of heads of Departments are, as a rule, made to the President of the United States; the only exception is that of the Secretary of the Treasury Department, which is made direct to Congress. The reports of heads of bureaus in any Department are usually made to the head of that Department, but the Comptroller of the Currency, as seen above, reports direct to Congress, and not through the President or the Secretary of the Treasury.

CHAPTER II.

ORGANIZATION AND POWERS OF NATIONAL BANKS.

12. Formation of National Banking Associations. SECTION 5133.-Associations for carrying on the business of banking under this Title may be formed by any number of natural persons, not less in any case than five. They shall enter into articles of association, which shall specify in general terms the object for which the association is formed, and may contain any other provisions, not inconsistent with law, which the association may see fit to adopt for the regulation of its business and the conduct of its affairs. These articles shall be signed by the persons uniting to form the association, and a copy of them shall be forwarded to the Comptroller of the Currency, to be filed and preserved in his office.

The natural persons meant are persons other than artificial persons, such as corporations, &c., who, from being of legal age and not otherwise disqualified, can give validity to papers by their signatures.

Articles of association are simply a preliminary agreement or contract among the signing parties, by which they associate themselves for the purpose of organizing a bank under the National banking laws. By entering into such articles each person becomes legally responsible to his or her associates. He cannot withdraw and refuse to organize a bank without their consent, unanimously expressed; although all but one associate desired to withdraw after signing, the remaining associate could legally compel the others to go on with the organization. The Comptroller requires

these articles to be signed in duplicate, so that instead of a copy an original can be sent to his office to be filed.

They may contain any provisions which the associates may choose to insert relative to the kind of banking they may wish to undertake, but they must not contain anything inconsistent with the provisions of the National banking law. Thus in their articles the associates might prescribe that the bank which they proposed to organize should issue no currency, which the National law permits, but they could not prescribe that the bank could loan money directly on real estate, which the National law forbids. In other words, the articles of association may limit the business of the proposed bank, but they cannot extend it beyond what the law allows. The insertion of illegal provisions in the articles does not. vitiate them. The legal provisions stand; the illegal ones are simply null and void. Section 5142 provides that the maximum limit of increase of capital stock may be provided for in the articles of association, but such maximum of increase is to be determined by the Comptroller of the Currency. Once so fixed, it has been held by the United States Attorney General that such maximum of increase cannot be changed by the bank, except through the instrumentality of Congress.

It is customary to insert in articles of association a provision for their amendment. This provision has force only as to those parts of the articles of association which the associates legally retain control over. Thus the name of the bank and the location can only be changed by Act of Congress, and if these are inserted in the articles they cannot be changed by a mere amendment by vote of associates, nor can the minimum limit of increase of stock be thus changed.

13. Organization Certificate.

SECTION 5134.-The persons uniting to form such an association shall, under their hands, make an organization certificate, which shall specifically state:

First. The name assumed by such association; which name shall be subject to the approval of the Comptroller of the Currency.

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 and city, town, or village.

Third. The amount of capital stock and the number of shares into which the same is to be divided.

Fourth. The names and places of residence of the shareholders and the number of shares held by each of them.

Fifth. The fact that the certificate is made to enable such persons to avail themselves of the advantages of this Title. The articles of association having been duly entered into, the next step is the execution of the organization certificate. In the articles the associates simply agree to form a bank; in the certificate they form it.

The name taken is subject to the approval of the Comptroller. This name, once taken, cannot under present law be changed by the direct action of the bank, but

can only be altered by an Act of Congress. A bill is now pending in Congress which, if it becomes a law, will enable any National bank to change its name with the approval of the Comptroller. ‡

The location is subject to the same restriction. The bill mentioned will, if it becomes a law, enable National banks to change their location under certain restrictions.

The Comptroller's office has in some cases permitted banks to open offices for the reception of deposits at places other than the location named in the organization certificate; but these offices cannot pay checks or make loans. Whether this is correct or not has never been conclusively tested in the courts.

The amount of stock and number of shares into which it is to be divided. This is subject to the restrictions of Section 5138, hereafter, (which see.)

14. Acknowledgment of Organization Certificate.

SECTION 5135.-The organization certificate shall be acknowledged before a judge of some court of record, or notary public, and shall be, together with the acknowledgment thereof, authenticated by the seal of such court, or notary, transmitted to the Comptroller of the Currency, who shall record ⚫ and carefully preserve the same in his office.

The organization certificate is made in duplicate by ruling of the Comptroller's office, and thus, while one original can, as required, be sent to the Comptroller's office, the other original can be retained by the bank. The existence of the association may be legally proved by the production of the original organization certificate, and also by a copy of such original duly certified by the Comptroller and authenticated by his seal of office. (See Thompson's National Bank Cases, pp. 145, 612, 622, 724.)

15. Corporate Powers of Associations.

SECTION 5136.-Upon duly making and filing articles of association and an organization certificate, the association shall become, as from the date of the execution of its organization certificate, a body corporate,* and as such, and in the name designated in the organization certificate, it shall have powerFirst. To adopt and use a corporate seal.

Second. To have succession for the period of twenty years† from its organization, unless it is sooner dissolved according to the provisions of its articles of association, or by the act of its shareholders owning two-thirds of its stock, or unless its franchise becomes forfeited by some violation of law.

Third. To make contracts.

*2 Abb., U. S., 416.

See Act July 12th, 1882, page 107.

See Act May 1, 1886, page 115 B.

Fourth. To sue and be sued, complain and defend, in any court of law and [or] equity, as fully as natural persons.

Fifth. To elect or appoint directors, and by its board of directors to appoint a president, vice-president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers, or any of them, at pleasure, and appoint others to fill their places.

Sixth. To prescribe, by its board of directors, by-laws not inconsistent with law, regulating the manner in which its stock shall be transferred, its directors elected or appointed, its officers appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed.

Seventh. 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.

But no association shall transact any business except such as is incidental and necessarily preliminary to its organization until it has been authorized by the Comptroller of the Currency to commence the business of banking.

This section should be most carefully perused and considered. The articles of association may be entered into, the organization certificate executed, but until such articles and certificate are properly filed with the Comptroller, the bank is not formed; but when these papers have been filed, then, from the date of the execution of the organization certificate, the association becomes a body corporate, and as such, and in the name, &c., it has powers, &c. It may be conceived that persons might associate, and for a long period defer the execution of an organization certificate. Some of the associates might not wish to carry out their agreement, and the matter might be brought to the courts for decision. Even after both papers are duly executed, there may be delay in filing, and after filing these papers, although the association thus becomes a body corporate, and can sue and be sued, &c., the same as a natural person, yet it can transact no business except such as is incidental and necessarily preliminary to its organization until it is authorized by the Comptroller to commence the business of banking. A bank may, therefore, be fully organized as far as subscriptions to its stock, election of directors, appointment of officers, preparation and adoption of by-laws are concerned; but, as will be

seen from the requirements of succeeding sections, if its capital stock be not paid in or United States bonds deposited, it cannot receive deposits, or make loans, or in any way deal with the public. A bank may remain in this inchoate condition for months, or possibly years. When it does further comply with the law, so as to secure the Comptroller's authority, its period of succession is shortened by just so much, since such period dates from the execution of its organization certificate. The period of succession cannot be for a period longer than twenty years, but associates may limit it to a shorter period, if they so prefer, by so stating in their articles of association. The first clause of enumerated powers gives the privilege of adopting and using a corporate seal. The Comptroller has required that this power be exercised, in order that important papers sent to his office may be authenticated by such seal.

The second clause relates to the period of succession, and has already been commented on.

Third. To make contracts. This has been held to mean not all contracts, but such contracts only aš are natural and germane to the exercise of the other powers granted in the section. Thus, a bank could not legally contract to build a railroad, but it might contract to make a loan at a future date.

Fourth clause. The jurisdiction of the courts-Federal, State, and Municipal— over suits brought by and against National banks, is regulated by Sections 563, 629, 711, 5198, 5242, 151, 152, and the proviso to Section 4 of the Act of July 12th, 1882, '(which see.)

Fifth clause. Directors may be elected or appointed. They must first be elected, and this in accordance with the requirements of Section 5145, (which see.) The appointment refers to the filling of vacancies, (see Section 5148.) The officers proper are appointed by the directors, who also define their duties, &c.

Sixth clause gives power to the board of directors to make provision for the government of the internal affairs of the bank within the general provisions of the law. They may, for instance, provide in a by-law that in case of a vacancy in the board of directors the president should exercise the power of appointment in behalf of the board; but they could not by a by-law require a delay of six months before vacancies were filled, inasmuch as Section 5148 requires the immediate filling of such vacancies. They might determine that the vice-president and cashier should sign the notes of the bank, and not the president and cashier; but they could not devolve both offices of vice-president and cashier on same person, inasmuch as the law requires each note to be signed by two different persons.

Seventh clause. There are two constructions of this section-one that the words "all such incidental powers as may be necessary to carry on the business of banking" are to be taken by themselves, and that they grant the exercise of any power whatever which, by any ingenuity, could be made to appear consistent with a banking business. The other construction, and the one which is sustained by the greatest weight of authority, is that the words quoted are limited by what follows; in other words, the banking, in which National banks are authorized to exercise incidental powers, is defined as discounting and negotiating promissory notes, drafts, &c.; receiving deposits; buying and selling exchange, coin, and bullion; loaning money on personal security, and issuing notes; and nothing else. It has been held that the legal maxim "expressio unius est exclusio alterius" holds; that what is not expressly granted is withheld. Thus there has been grave doubt as to whether it was legal