BANK MUST MAKE ANNUAL REPORTS. In one year from the time the first assessment is levied, and annually thereafter, each bank subject to the provisions of this act shall report to the bank commissioner the amount of its average daily deposits for the preceding year, and if said deposits are in excess of the amount upon which one per cent was previously paid, said report shall be accompanied by additional funds to equal one per cent of the said daily average excess of deposits, less the deposits of state funds properly secured and less the deposits of the national government for the year over the preceding year, and each amount shall be added to the depositors' guaranty fund. SPECIAL ASSESSMENT MAY BE MADE. If the depositors guaranty fund is depleted from any cause, it shall be the duty of the state banking board, in order to keep said fund to one per cent of the total deposits in all of the banks subject to the provisions of this act, to levy a special assessment upon the capital stock of the banks subject to this act, according to the amount of their deposits, as reported in the office of the bank commissioner, and said special assessment shall become immediately due and payable. NEW BANK MUST PAY THREE PER CENT. OF CAPITAL. SECTION 3. Banks organized subsequent to the enactment of this act shall pay into the depositors' guaranty fund three per cent of the amount of their capital stock when they open for business, which amount shall constitute a credit fund, subject to adjustment, on the basis of its deposits, as provided for other banks now existing at the end of one year; provided, however, said three per cent payment shall not be required of new banks formed by the reorganization or consolidation of banks that have previously complied with the terms of this act. Amendment, February 12, 1908 Laws 1907-1908, p. 153 c. 6, Art. 3. EMERGENCY. Sec. 3. An emergency for the preservation of the public peace, health and safety is hereby declared to exist, and this act shall take effect from and after its passage and approval, Th foregoing act of the legislature which creates a State Insurance Fund and a board to administer the same, for the purpose of insuring all persons having deposits in the state bank of Oklahoma against any loss arising out of the failure of any state bank of said state has been held to be constitutional and wholly within the police power of the state, we give below the syllabus of the case: Noble State Bank v. Haskell, et al., 22 Oklahoma, 48. 1. BANKS AND BANKING-Depositors' Guaranty Fund. Constitutionality-Due Process of Law. The act "creating a state banking board, establishes a depositors' guaranty fund to insure depositors against loss when the bank becomes insolvent," etc., of December 17, 1907 (Laws 1907-1908, p. 145, c. 6 art. 2), as amended on February 12, 1908 (Laws 1908-1908, p. 153, c. 6 art. 3), is not in conflict with section 7, art. 2 (Bunn's Ed. Sec. 16) of the Constitution which provides that "No person shall be deprived of life, liberty, or property, without due process of law." SAME-Obligation of Contracts. Nor is it in violation of section 15, art. 2 (Bunn's Ed. Sec. 24) of the Constitution, which privides that "No law impairing the obligation of contracts shall ever be passed." SAME-Pursuit of Happiness. Nor is it violation of section 2, art. 2 (Bunns' Ed. Sec. 11) of the Constitution, which provides that "All persons have the inherent right to life, liberty, the pursuit of happiness, and the enjoyment of the gains of their own industry." SAME-Taking Private Property for Private Use. Nor is it in violation of section 23, art. 2 (Bunns' Ed. Sec. 32) of the Constitution, which provides that: "No private property shall be taken or damaged for private use, with or without compensation, unless by the consent of the owner, except for private ways of necessity, or for drains and ditches across lands of others for agricultural, mining or sanitary purposes, in such manner as may be prescribed by law." SAME-Taking Private Property for Public Use. Nor is it in violation of section 24, art. 2 (Bunn's Ed. Sec. 33) of the Constitution, which provides that "Private Property shall not be taken or damaged for public use without just compensation." SAME-Statutes-Title of Act. Nor is said act, embracing the provision relative to the establishment of the depositors' guaranty fund, to secure depositors against loss when the bank becomes insolvent, invalid on account of section 57, art. 5 (Bunns' Ed., Sec. 130) of the Constitution, which provides that: "Every act of the Legislature shall embrace but one subject, which shall be clearly expressed in its title, except * * * * * * provide, that if any subject be embraced in any act contrary to the provisions of this section, such act shall be void only as to so much of the law as may not be expressed in the title thereof." The stock objections to Workmen's Compensation or Insurance against Loss of Wages arising out of Industrial Accidents, that such an act violates the following constitutional provisions: 1. Taking of property without due process of law, etc. 2. No law impairing the obligation of a contract shall ever be passed. 3. All persons have the inherent right to life, liberty, the pursuit of happiness and the enjoyment of the gains of their own industry. 4. The taking of private property for private use. 5. The taking of private property for public use. have all been answered in the foregoing case. That, it is wholly within the police power of the state, when there exists an emergency for the preservation of the public peace, health and safety of its inhabitants, to levy a tax on all the state banks of a state for the purpose of creating a depositors' guarantee fund from which the depositors of any insolvent state bank of that state might be paid in full for the amount of their deposits. The Supreme Court of the United States, on January 3rd, 1911, sustained the Supreme Court of Oklahoma and Oklahoma Bank Guarantee Act, likewise a similar act of Kansas and Nebraska. We give the opinions in full below: Mr. Justice HOLMES delivered the opinion of the Court. This is a proceeding against the Governor of the State of Oklahoma and other officials who constitute the State Banking Board, to prevent them from levying and collecting an assessment from the plaintiff, under an act approved December 17, 1907. This act creates the Board and directs it to levy upon every bank existing under the laws of the State an assessment of one per cent of the bank's average daily deposits, with certain deductions, for the purpose of creating a Depositors' Guaranty Fund. There are provisos for keeping up the fund, and by an act passed March 11, 1909, since the suit was begun, the assessment is to be five per cent. The purpose of the fund is shown by its name. It is to secure the full repayment of deposits. When a bank becomes insolvent and goes into the hands of the Bank Commissioner, if its cash immediately available is not enough to pay the depositors in full, the Banking Board is to draw from the Depositors' Guaranty Fund (and from additional assessments if required) the amount needed to make up the deficiency. A lien is reserved upon the assets of the failing bank to make good the sum thus taken from the fund. The plaintiff says that it is solvent and does not want the help of the Guaranty Fund, and that it cannot be called upon to contribute toward securing or paying the depositors in other banks consistently with Article I, section 10, and the Fourteenth Amendment of the Constitution of the United States. The petition was dismissed on demurrer by the Supreme Court of the State. 22 Okla. 48. The reference to Article I, section 10, does not strengthen the plaintiff's bill. The only contract that it relies upon is its charter. That is subject to alteration or repeal, as usual, so that the obligation hardly could be said to be impaired by the act of 1907 before us, unless that statute deprives the plaintiff of liberty or property without due process of law. See Sherman v. Smith, 1 Black, 587. Whether it does so or not is the only question in the case. In answering that question we must be cautious about pressing the broad words of the Fourteenth Amendment to a drily logical extreme. Many laws which it would be vain to ask the Court to overthrow could be shown, casily enough, to transgress a scholastic interpretation of one or another of the great guarantees in the Bill of Rights. They more or less limit the liberty of the individual or they diminish property to a certain extent. We have few scientifically certain criteria of legislation, and as it often is difficult to mark the line where what is called the police power of the States is limited by the Constitution of the United States, judges should be slow to read into the latter a nolumus mutare as against the law-making power. The substance of the plaintiff's argument is that the assessment takes private property for private use without compensation. And while we should assume that the plaintiff would retain a reversionary interest in its contribution to the fund so as to be entitled to a return of what remained of it if the purpose were given up (See Receiver of Danby Bank v. State Treasurer, 39 Vt., 92, 98), still there is no denying that by this law a portion of its property might be taken without return to pay debts of a failing rival in business. Nevertheless, notwithstanding the logical form of the objection, there are more powerful considerations on the other side. In the first place it is established by a series of cases that an ulterior public advantage may justify a comparatively insignificant taking of private property for what, in its immediate purpose, is a private use. Clark v. Nash, 198 U. S. 361. Strickly v. Highland Boy Mining Co., 200 U. S. 527, 531. Offield v. New York, New Haven & Hartford R, R. Co., 203 U. S. 372. Bacon v. Walker, 204 U. S. 311, 315. And in the next, it would seem that there may be other cases beside the every day one of taxation, in which the share of each party in the benefit of a scheme of mutual protection is sufficient compensation for the correlative burden that it is compelled to assume. See Ohio Oil Co. v. Indiana, 177 U. S. 190. At least, if we have a case within the reasonable exercise of the police power as above explained, no more need be said. It may be said in a general way that the police power in a general way extends to all the great public needs. Camfield v. United States, 167 U. S. 518. It may be put forth in aid of what is sanctioned by usage, or held by the prevailing morality or strong and preponderant opinion to be greatly and immediately necessary to the public welfare. Among matters of that sort probably few would doubt that both usage and preponderant opinion give their sanction to enforcing the primary conditions of successful commerce. One of those conditions at the present time is the possibility of payment by checks drawn against bank deposits, to such an extent do checks replace currency in daily business. If then the legislature of the State thinks that the public welfare requires the measure under consideration, analogy and principle are in favor of the power to enact it. Even the primary object of the required assessment is not a private benefit as it was in the case above cited of a ditch for irrigation or a railway to a mine, but it is to make the currency of checks secure, and by the same stroke to make safe the almost compulsory resort of depositors to banks as the only available means for keeping money on hand. The priority of claim given to depositors is incidental to the same object and is justified in the same way. The power to restrict liberty by fixing a minimum of capital required of those who would engage in banking is not denied. The power to restrict investments to securities regarded as relatively safe seems equally plain. It has been held, we do not doubt rightly, that inspections may be required and the cost thrown on the bank. See Charlotte, Columbia & Augusta R. R. Co. v. Gibbes, 142 U. S. 386. The power to compel, beforehand, co-operation, and thus, it is belieed, to make a failure unlikely and a general panic almost impossible, must be recognized, if government is to do its proper work, unless we can say that the means have no reasonable relation to the end. Gundling v. Chicago, 177 U. S. 183, 188. So far is that from being the case that the device is a familiar one. It was adopted by some States the better part of a century ago, and seems never to have been questioned until now. Receiver of Danby Bank v. State Treasurer, 39 Vermont, 92. People v. Walker, 17 N. Y. 502. Recent cases going not less far are Lemieux v. Young, 211 U. S. 489, 496. Kidd, Dater and Price Co. v. Musselman Grocer Co., 217 U. S. 461. It is asked whether the State could require all corporations or all grocers to help to guarantee each other's solvency, and where we are going to draw the line. But the last is a futile question, and we will answer the others when they arise. With regard to the police power, as elsewhere in the law, lines are pricked out by the gradual approach and contact of decisions on the opposing sides. Hudson County Water Co. v. McCarter, 209 U. S. 349,355. It will serve as a datum on this side, that in our opinion the statute before us is well within the State's constitutional power, while the use of the public credit on a large scale to help individuals in business has been held to be beyond the line. Loan Association v. Topeka, 20 Wall. 655. Lowell v. Boston, 111 Mass. 451. The question that we have decided is not much helped by propounding the further one, whether the right to engage in banking is or can be made a franchise. But as the latter question has some bearing on the former and as it will have to be considered in the following cases, if not here, we will dispose of it now. It is not answered by citing authorities for the existence of the right at common law. There are many things that a man might do at common law that the States may forbid. He might embezzle unti! a statute cut down his liberty. We cannot say that the public interests to which we have adverted, and others, are not sufficient to warrant the State in taking the whole business of banking under its control. On the contrary we are of opinion that it may go on from regulation to prohibition except upon such conditions as it may prescribe. In short, when the Oklahoma legislature declares by implication that free banking is a public danger, and that incorporation, inspection and the abovedescribed co-operation are necessary safeguards, this Court certainly cannot say that it is wrong. North Dakota v. Woodmansee, 1 North Dakota, 246. Brady v. Mattern, 125 Iowa, 158. Weed v. Bergh, 141 Wis. 569. Commonwealth v. Vrooman, 161 Pa. 306. Myers v. Irwin, 2 S. & R. 368. Myers v. Manhattan Bank, 20 Ohio, 283, 302. Attorney General v. Utica Insurance Co., 2 Johns. Ch 371, 377. Some further details might be mentioned but we deem them unnecessary Of course objections under the State constitution are not open here. Judgment affirmed. No. 445. Ashton C. Shallenberger, Governor of the State of Appeal from the Cir- Mr. Justice HOLMES delivered the opinion of the Court. This is a suit by many banks to prevent the Banking Board of Nebraska from carrying out and enforcing an act similar to the Oklahoma statute just passed upon. It forbids banking except by a corporation formed under the act and provides for a guaranty fund. The Circuit Court held the statute unconstitutional and issued an injunction against the enforcement of it. 172 Fed. Rep. 999. For the reasons given in the foregoing case the decree of the Circuit Court must be reversed. Decree reversed. True copy. Test: Clerk Supreme Court, U. S. |