In a previous chapter of this book Comptroller Lacey was quoted as saying in one of his annual reports, that:

Banks are indispensable to the successful conduct of the various business enterprises which form a prominent feature in modern civilization. These agencies must keep pace with the progress made in manufactures, in commerce, and in all forms of industrial activities, or serious embarrassments will surely follow. The national system must occupy the field or give way to another.

Mr. Crissinger practically exemplified this suggestion of Mr. Lacey on the question of the right of national banks to establish and operate branch offices in competition with State institutions which have that authority under State statutes. This privilege or advantage which State banks have over national associations has induced many national banks in recent years to leave the national banking system and reorganize under State authority.

The opening of a branch bank by the First National Bank of St. Louis, Missouri, in June, 1922, and similar action taken by a number of the larger national banks in other sections of the country and threatened by others, brought this issue to such an acute stage that Mr. Crissinger found it necessary to look carefully into the law on the subject to determine whether there was any way through administrative regulation of solving this question and affording national banks the relief they sought. After a careful and thorough consideration of the whole subject and consultation with recognized legal authorities the conclusion was reached that while national banks had no authority under existing law to establish and operate branches, it was considered permissible under the law for them to establish and operate additional offices or agencies in the same place where they are authorized to do business.

As the law has not been amended in this respect since 1864, except as to foreign branches authorized by the Federal Reserve Act, it is inconceivable that the National Bank Act should have been in existence nearly sixty years without someone having discovered that the act permitted the exercise of the very power that many of the banks have been clamoring for since the date of its original enactment in 1863.

Although Mr. Crissinger up to August 30, 1922, had issued no official ruling on the subject in his correspondence with individual bankers and others, he expressed the opinion that:

While a national bank was chartered to do business in a certain place, it was not restricted to a particular location in that place, and that there is no limitation upon the number of offices or banking houses it may have in which to do business in the place of its location as long as these additional offices are controlled and operated by the same board of directors and the same officers.

Mr. Crissinger also stated that he was of the opinion that :

This view was and had been sustained by the national banking laws ever since their enactment in 1863.

The National Bank Act authorizes the doing of business in a certain place, and there is a clear distinction between a branch bank and an additional place of business in the city where the bank is authorized to do business. He contended that the law does not mean that the bank's business must be done in one banking office or in one banking house in that place, but that the national bank act clearly authorizes the bank to do business in as many banking houses or offices in that place, as may be necessary to carry on the business for which it was incorporated, and that the corporate authorization empowers the bank to do all the business that may be entrusted to it. The implied and incidental powers secured to the bank by its charter clearly clothe the directors with the power to furnish enough offices and banking house facilities in which to properly conduct the proffered business in the place of its domicile fixed by the bank's charter.

This opinion of Mr. Crissinger, however, is contrary to the position of the Comptroller's office on this subject since the establishment of the bureau.

Section 11 of the original National Bank Act, approved February 25, 1863, reads: and their usual business shall be transacted in banking offices located in the places specified respectively in its certificate of association and not elsewhere.

This provision bears out Mr. Crissinger's contention and would stem to comtemplate that the intent of this act was to permit the banks to maintain more than one banking house or office, but the Act of 1863, it will be remembered, was repealed in its entirety by the Act of June 3, 1864, and Section 8 of the latter act provides: and its usual business shall be transacted at an office or banking house located in the place specified in its organization certificate.

It will be noted, therefore, that the words "banking offices" in the Act of 1863 were changed in the amendment to read "office or banking house" and the word "places" was changed to read "place," thus implying that Congress intended by the amendment that a bank should be permitted to have but one office or banking house.

This has been the interpretation of the law by every Comptroller of the Currency from Mr. McCulloch to Mr. Williams, inclusive, the immediate predecessor of the present Comptroller, Mr. Crissinger, and this construction of the law has been sustained by every Solicitor of the Treasury during that entire period and by Attorney General Wickersham in an opinion written by Assistant Attorney General J. A. Fowler under date of May 11,1911, in the case of the Lowry National Bank of Atlanta, Georgia.

Banks applying to Comptroller Crissinger for permission to open additional offices were required to file a resolution adopted by the board of directors authorizing the proper officers to make application to the Comptroller of the Currency for permission to establish an additional office or offices. Under the Comptroller's regulation the application was required to show the particular locality at which it was desired to open such office, the necessity for the establishment of the office, the population to be served therefrom, the distance of the nearest bank from the point of location of the proposed office, the amount of capital and surplus of the applying bank, and the ability of the bank to meet the demands of the business community in the section which it was proposed to supply, etc., etc.