On May 1, 1919, the First National Bank of Canton, Pennsylvania, brought suit in equity for an injunction against John Skelton Williams, individually, not as Comptroller of the Currency, in the District Court of the United States for the Middle District of Pennsylvania. On the day the suit was instituted the court issued a temporary injunction and also a rule against the defendant to appear on May 9, 1919, and show cause why a preliminary injunction should not issue. On the return day of the rule, which had in the meantime been continued to May 19th, a motion to dismiss for want of process was urged by the Department of Justice, appearing for the Comptroller, who declined to enter a general appearance until this question had been passed upon by the court. Complainants were permitted to amend their bill so as to name the Comptroller of the Currency in his official capacity as defendant, the original complaint describing him as "claiming to be and exercising the powers of the Comptroller of the Currency". On May 20th the court announced that it would overrule defendant's motion, but might reinstate it upon further consideration. With proper reservations affidavits were filed by return to the rule and a motion was made to dismiss the bill for want of jurisdiction, for lack of equity and for other causes. The case was fully argued by both sides and submitted on May 20, 1919. The court reserved its decision and continued the injunction in effect.
On October 12, 1919, an order was entered dismissing the bill on motion made by defendant, appearing specially, on the ground that process had not been legally served, and from this action of the court complainants appealed to the Supreme Court of the United States. The Supreme Court, on April 19, 1920, reversed the District Court on the question of process and the case was remanded to the District Court.
On a special trial of the case additional affidavits and briefs were filed and the matter finally placed on the court calendar for argument October 6, 1920. It was subsequently continued until December 16, 1920, when it was fully argued and resubmitted. During the course of the argument the court's attention was called to the fact that in the near future the defendant would retire from the office of Comptroller of the Currency, and that it was very important, because of the questions involved, that a decision be rendered before that time. The court again took the case under consideration.
On March 2, 1921, the defendant resigned as Comptroller of the Currency, and on March 31st a decree dismissing the bill for want of a proper defendant to stand in judgment was entered, and the injunction, of course, ceased therewith to be in effect.
Mr. Louis T. McFadden, a Representative in Congress from Pennsylvania, and chairman of the Banking and Currency Committee of the House of Representatives, was president of this bank.
For a year or more before the institution of the suit by the First National Bank, the bank had been in a very unsatisfactory condition, so much so that it was necessary to place it on the special list for frequent examination. This fact seemed to exasperate the president, Mr. McFadden, to such an extent as to impel him to make a personal attack upon Mr. Williams on the floor of the House of Representatives, in the course of which he impugned the Comptroller's motives for placing his bank on the special list and subjecting it to the annoyance of frequent examinations. He also introduced a bill for the abolition of the office of Comptroller of the Currency, and the merger of the Currency Bureau with the Federal Reserve Board.
To a man of Mr. Williams' controversial tendencies, the action of Mr. McFadden was equivalent to a challenge to combat, which he very readily accepted, with the result that a long and bitter personal controversy followed, and was given broad publicity.
It was alleged in the bill of particulars filed by the bank in the suit to enjoin the Comptroller that, in order to injure the complainant's president, toward whom he entertained personal ill will, the Comptroller determined to destroy the bank's business, and to that end he had maliciously persecuted and oppressed it for three years, in the following ways among others: By often demanding special reports and information beyond the powers conferred upon him by law; by disclosing confidential and official information concerning it to banks, members of Congress, representatives of the press, and the public generally, by inciting litigation against the bank and its officers; by publishing and disseminating false statements, charging the bank with unlawful acts and improper conduct and reflecting upon its solvency; and by distributing among its depositors, stockholders and others alarming statements intending to affect its credit, etc. And further, that unless restrained, he would continue these and similar malicious and oppressive practices.
It will be noted from the foregoing that the complainant in this bill charged Comptroller Williams with being actuated by personal ill will towards the bank, whose business he had sought to destroy and had maliciously persecuted and oppressed the bank for three years, immediately previous to the institution of the suit to enjoin him. But as a matter of fact, and in justice to Mr. Williams, it should be stated that he had nothing whatever to do with the criticisms of this bank by the Comptroller's office, or with directing the frequent examinations into its condition by national bank examiners, until long after the bank had been placed on what was known as the "special list," because of its unsatisfactory condition, as will be seen by the following affidavit made by Thomas P. Kane, the Deputy Comptroller of the Currency, filed in the case:
I, Thomas P. Kane, Deputy Comptroller of the Currency, being duly sworn, depose as follows: I have been connected with the office of the Comptroller of the Currency in Washington for over thirty-two years, to wit, since June, 18S6. In June, 1899, I was appointed Deputy Comptroller of the Currency, and have held that position continuously since that date, during which time there have been four Comptrollers of the Currency, namely, Charles G. Dawes, William B. Ridgely, Lawrence O. Murray and John Skelton Williams. Pending a vacancy in the office from April 23, 1913. to February 2. 1914. I held the position of Acting Comptroller. During this entire period