The name First National Bank is the only bank title that ever had a commercial value, consequently this title was very much in demand by the organizers of new banks and by the officers of existing banks desiring to change the names of their associations. Originally it was the purpose of the Comptroller to restrict all national bank titles to serial numbers so as to indicate the order in which two or more banks in the same city or town were organized, but this plan was so strongly opposed by the organizers of banks in large cities and by State banks contemplating conversion into national associations, that the plan was abandoned when the serial numbers began to run high. In New York City the serial numbers ran as high as the Tenth National Bank and the State banks preferred retaining their old names rather than convert into a national bank and take a high serial number.
The title First National, if it means anything, indicates that the bank of that name was the first bank to be established in the place of its location. Acting on this assumption, therefore, other banks having items for collection and no regular correspondent at that place, sent their business to the First National Bank.
Previous to the passage of the Federal Reserve Act the title of First National was much more valuable than it has been since the Federal Reserve Banks established the practice of collecting at par all checks and drafts for member banks in their respective districts and crediting them with the proceeds on their books. But even without these collection items there is a great deal of business that goes to banks with the title of First National which they probably would not receive otherwise, so that the title still retains considerable commercial value.
There have been many bitter contests between rival applicants for this title and many keen disappointments over its refusal.
As far back as 1886, when William L. Trenholm was Comptroller of the Currency, there was quite a spirited contest for this title between two applicants in which a United States Senator took an active interest. In pleading for the title he indiscreetly made the statement to the Comptroller that the title was worth $50,000 to his constituents. Being uncertain of the motive which prompted the Senator to make that statement, Colonel Trenholm, with a flushed face, replied in a very emphatic manner, "Well, senator, if the title 'First National' has such a commercial value as you say it has, I will establish a code of rules for the government of this office in approving that title which will determine the matter beyond question," and thereupon he issued the following order:
The title of "First National Bank" will not be approved unless:
1st. The application therefor is really the first application to establish a national bank in the place named in the title, or unless all such applications previously made have lapsed or been abandoned.
2nd. Unless no national bank is located at the time in the place named in the title.
3rd. Unless the title asked for, though once in use, is at the time vacant by reason of the entire extinction of the bank that had it.
4th. Unless every national bank at the time located in the place named in the title assents to the application. The term "place" means any ward of a city, county, State or geographical area.
When Mr. Lacey became Comptroller in 1889, he modified this rule so as to permit any existing bank in the place to have the title "First National," provided it procured the written approval of all other national banks in the same place.
In July, 1919, Mr. Williams, then Comptroller, laid down the rule that an application for the title "First National" would receive favorable consideration under the following conditions:
1st. When no national bank existed at the locality at the time of receipt of the application.
2nd. When the bank applying was the only existing national bank in the place.
3rd. When the bank applying was the oldest existing national bank in the locality and none of the other national banks was a successor of the original first national bank.
Comptroller Williams later modified this rule by authorizing the conversion of the Illinois State Trust Company in East St, Louis, 111., into a national bank under the title "First National," on the ground that its shareholders had been interested in the old First National Bank of that city, which went into voluntary liquidation March 3, 1907, and was absorbed by the Illinois State Trust Company, but at the time the conversion was authorized, there were two other national banks existing in East St. Louis.
Further modifications of the rule governing the approval of this title have been made by succeeding Comptrollers, until now precedent may be found for almost any position that the Comptroller may think proper to adopt.