A question was raised during Mr. Murray's administration as to the right of a national bank, organized with a small capital to do business in a suburb or place adjacent to a large city, to change its location to another point within that city after the corporate limits of the city had been extended to include the suburb, without first increasing the capital of the bank to the amount required by law for a bank in a city with a population of six thousand or more.

The law required the organization certificate of a bank to state specifically the place where its business was to be conducted, and the bank was chartered to do business in that place and nowhere else. The law authorized a bank to change its location by a vote of its stockholders owning two-thirds of the stock and with the approval of the Comptroller, to any other place within the same State not more than thirty miles distant, after complying with the requirements of law in regard to the minimum amount of capital.

While a bank had an unquestioned right to change its domicile to any other point within the city or location in which it was organized to do business, it was contended by the Comptroller's office that when the corporate limits of a city were extended to cover an adjacent place or suburb, a bank with a small capital organized to do business in that place had no right to change its location to a point within the city proper where it could not have been authorized to do business in the first place without a larger capital.

The First National Bank of Capitol Hill, Oklahoma, was chartered November 17, 1909, with a capital of twenty-five thousand dollars to do business in the village of Capitol Hill, adjacent to Oklahoma City. Shortly afterward the corporate limits of Oklahoma City were extended to cover Capitol Hill, and the bank subsequently removed its location to the business center of the city without first increasing its capital from twenty-five to two hundred thousand dollars, the minimum capital required by law for a bank in a city with a population of fifty thousand or more.

The Comptroller referred the case to the Solicitor of the Treasury with a request to instruct the United States Attorney for Oklahoma to commence an action against the bank for forfeiture of charter.

After a hearing in the office of the Solicitor at Washington, by agreement with counsel for the bank, a suit was instituted in the name of the Comptroller in the United States District Court for the Second District of Oklahoma for annulment of the bank's charter.

The defendant demurred to the petition, but the Court overruled the demurrer and held that the petition stated good ground for cause of action for forfeiture of charter.

The case was then appealed to the United States Circuit Court of Appeals, which Court held that the alteration of the boundaries of the City of Oklahoma did not entitle the bank to remove its place of business to a point within that city without first increasing its capital as required by the Comptroller, and having so removed without compliance with those conditions the Comptroller was entitled to maintain a suit for the forfeiture of the bank's charter.

In the meantime, in anticipation of this decision, the bank, by a vote of its stockholders, was placed in voluntary liquidation on July 22, 1913.