A banking corporation has not the right to become a stockholder in another corporation,1 unless the act is made necessary to preserve a security2 which it has taken in a banking transaction, or unless it is permitted to do so in order to make a deposit of securities under a banking law.3 It has no power to subscribe for stock in a railroad corporation,4 nor to engage in the business of buying and selling stocks for profit;5 and if a bank buys stock in its own name which it has no authority to buy it will not be held as a stockholder.6 Where the bank is prohibited from purchasing or holding stock in another bank, it has been held that the bank cannot take a pledge of such stock.7 National banks have no power to engage in the selling of stocks8 or railroad bonds on commission,9

11 See Sec. 33, ante, and note 3, Sec. 105, ante. But if it converts property-it has agreed to sell, it is liable in conversion. First Nat. Bank v. Anderson, 172 U. S. 573.

12 Bank v. Lanier, 11 Wall. 369. See also Bridgeport Bank v. New York, etc. R, R. Co., 30 Conn. 270.

1 Bank of Commerce v. Hart, 37 Neb. 197; Franklin Bank v. Commercial Bank, 36 Ohio St. 350, and cases cited therein. But on a wrong construction of a statute it is held that the bank can do so. Latimer v. State Bank, 71 N. W. R 225.

2 See cases in notes 10,11 and 12, infra.

3 Curtis v. Leavitt, 17 Barb. 809.

4 Nassau Bank v. Jones, 95 N. Y. 115. But see City of Goodland v. Darlington Bank, 74 Mo. App. 365.

5 Talmage v. PeU. 7 N. Y. 328.

6 Cal. Bank v. Kennedy, 167 U. S. 362.

7 Franklin Bank v. Commercial Bank, 36 Ohio St. 350.

sSearle v. First Nat. Bank, 3 Walk. (Pa.) 395; First Nat. Bank v. Nat Ex. Bank, 92 U. S. 122.

9 Weckler v. First Nat. Bank, 42 Md. 581. This case was very well argued. It holds that a representation never ratified made by an agent as to an ultra vires contract is not within the scope of the agent's authority and therefore not binding on the bank. See Willett v. Farmers' Sav. Bank, 77 N. W. R. 519. The case is rightly decided as to that point The third person had no right to rely on the representation. See also Farmers' Nat because such banks have only the powers that are granted to them by the national banking act.10 Yet those banks may accept stocks in satisfaction of a doubtful debt, and may, in order to settle claims wherein the bank is interested, pay a larger amount than would otherwise have been exacted and take stocks as part of the settlement, provided the stocks are taken to be sold afterwards and the act is necessary to avert loss.11 National banks may loan money on the security of stocks, and may sell the same under a power,12 and may purchase the same in order to protect their own interests.13