One of the last official acts of Comptroller Williams on the eve of his retirement from office was to make a call upon the national banks for a report of their condition at the close of business February 21, 1921, fifty-four days after the last previous report of December 29, 1920, the sixth report for that year.
The call for February 21 required the banks to show the aggregate amount of salaries or compensation paid the officers of the banks for the month of January, 1921, the annual pay of all the officers and the number of officers on the date of the report.
As the law required reports of condition to be published in the same form in which they were made to the Comptroller it followed that the information in regard to salaries paid must necessarily be shown in the published statements of the banks.
Many of the banks objected most strenuously by letter and by wire to this requirement and requested its modification to the extent at least of relieving them of the necessity of publishing these items, claiming that no public good would be accomplished by their publication.
Banks in the smaller communities, whose officers were limited to a president and a cashier only, objected to making known to everybody in the town the amount of compensation paid to their officers.
Clearing house associations in some of the larger cities met and after considering the question were reported as having advised their member banks not to furnish the information, or, if furnished, not to include it in their published statements.
The general counsel for the American Bankers' Association was appealed to for an opinion as to whether the compensation paid to officers and employees was a resource or liability within the meaning of Section 5211 of the Revised Statutes of the United States, such as the Comptroller of the Currency was empowered to call for under authority of said section and as the banks were required to furnish and publish in their statements of condition.
In reply to this request counsel of the association rendered a written opinion as follows:
Section 5211 requires five reports each year to the Comptroller "according to the form which may be prescribed by him" and "each such report shall exhibit, in detail and under appropriate heads, the resources and liabilities of the Association," etc. The report must be published "in the same form in which it is made to the Comptroller."
The Supreme Court of the United States in Cochran v. U. S. 15 Supreme Court Reporter 628 says that the object of Section 5211 is "to apprise the Comptroller of the
Currency and the public of the condition of each national bank at stated periods."
In my opinion a statement of salaries paid, does not come within the spirit and meaning of Section 5211; it is not the character of information which the law requires shall be reported upon call of the Comptroller and published. It is not a statement of what the bank owns or what it owes - its resources and liabilities - and a report and publication of such salaries would in no way fulfill the object of Section 5211 which as declared by the Supreme Court is, as already said, to apprise the Comptroller and the public of the bank's condition at stated periods. The Comptroller's authority is measured by law- he cannot go beyond the law and this is simply an authority to call for a report of resources and liabilities so that he and the public may know the condition of the bank. When he goes beyond this and demands the publication of additional information of a confidential character, he is, in my opinion proceeding without authority of law.
True, Section 5211 also provides for special reports to enable the Comptroller to acquire "a full and complete knowledge of its (the bank's) condition." But, assuming the authority to require these special reports would cover a wider latitude of information, there is no requirement for publication in such case.
I am, therefore, inclined to the opinion that a report of the compensation paid to officers and employees is not a report of the resources and liabilities and that the Comptroller of the Currency has no power to force the reporting banks to publish this confidential information.
Concerning the penalty for failure to make reports, Section 5213 Revised Statutes imposes a penalty of $100 a day for failure to make and transmit the required report; but this Section contains no penalty for failure to comply with the provision of the Act that the report must be published in the same form in which it is made to the Comptroller. Even assuming there was authority to require publication of this information, which I very much doubt, the only penalty for non-publication would be the general penalty provided by Revised Statutes Section 5239 of forfeiture of the franchise but a prerequisite to such forfeiture is judgment of a court in a suit brought for the purpose by the Comptroller of the Currency.
Most of the protests that were filed against furnishing this information or requests for a modification of the requirements were received at the Currency Bureau after Mr. Williams had retired from office, and during the period of fifteen days intervening between his retirement and the appointment and qualification of his successor the office was in charge of the Deputy Comptroller as Acting Comptroller and the consideration and disposition of these protests therefore devolved upon him. A new administration had taken charge of the affairs of Government and a new Secretary of the Treasury had just been inducted into office. It was believed that neither the President nor the Secretary of the Treasury was in sympathy with the requirement of the retired Comptroller and there was some doubt as to his authority to require the banks to make and publish in a report of condition the compensation paid their officers, which it was contended was not a resource or liability. The Acting Comptroller therefore submitted the opinion of the general counsel of the American Bankers' Association to the Comptroller's counsel, with a request for his views and interpretation of the law on the subject, who rendered an opinion as follows :