OF ADMIRALTY IN THE UNITED STATES.

the United States, when it is decided in the case of The Genesee Chief, that the Act of 1845, extending jurisdiction, would be void, if it depended upon the clause of the Constitution conferring upon Congress the power to regulate commerce among the States? "The jurisdiction of the United States cannot be made to depend on regulations of commerce. They are entirely distinct things, having no necessary connection with each other."1

However this may be, we think the decisions of the Supreme Court afford no authority for the cases of The Emma Johnson and The Sarah Jane; and this position of the district courts must be considered as directly in conflict with them.

If the foregoing conclusions are correct, the Admiralty Jurisdiction of the United States is exclusive, by the process in rem, over all civil maritime causes arising in voyages between ports of different States, on tide water, and waters therewith connected; and over all matters arising in voyages between ports of one State, excepting maritime contracts.

1 The Commerce, 1 Black, 574.

V.

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BANK CASHIERS.

THE rapid fluctuations of values, and the consequent speculation, induced by the Legal Tender Act, have had as their natural concomitant an almost equally widespread disturbance of morals among the classes most nearly exposed to their pernicious influences. The result has been apparent in an unwonted frequency of frauds and defalcations among bank officers, conducted with extraordinary skill and audacity, and often involving sums of enormous magnitude. The public, through the banks, and not less than the banks, have been severe sufferers by these acts. It is notorious that the stock of a banking corporation, paying the same dividends as a railroad corporation, nevertheless sells much lower in the market. The difference marks the insecurity which capitalists generally consider attendant upon bank property, by reason of its peculiar liability to plunder by unprincipled officials. It would be idle to say that, in all cases, this evil could be averted by a correct and widely disseminated knowledge of the precise legal powers and duties of the various officers of a bank. But it is equally certain that such a knowledge would block in the inception a large proportion of the fraudulent acts of such officers, would even more frequently prevent them from becoming the tools of designing men by questionable and invalid stretches of authority, and would thus save vast sums of money in the outset, and crippling litigation afterward. Ignorance on this subject throws wide the door to frauds, originating both within and without the corporations. In 1841, Judge Rogers, of Pennsylvania, said, "perhaps many of the disasters which have lately befallen those institutions [banks], have arisen from the assumption of power by the cashier and president." The remark which was true in 1841, is much more true in 1869.

But no sooner does one undertake to collate the authorities which go to define and limit the powers of bank officers, than he is struck with the unusual multitude of entirely novel questions which in all reason must be expected sooner or later to arise, and each of which will require a suit and a decision, perhaps several

suits and decisions, for its complete settlement. Probably in no other department of the law does the ground traversed bear so small a proportion to that yet unexplored. Many causes combine to produce this state of affairs.

Chief among them is the fact that the precise sphere of each officer has never, in this country, been accurately defined by statute. This is not only a great but an entirely unnecessary misfortune. It is a matter in which we differ materially from the English. With them, the banking business is, in all its executive departments, in great measure regulated by enacted law; and the matters not provided for in the public statutes are commonly fixed in the deed of settlement of each company. Many functions of the "manager" and of the "public officer" are allotted to them by acts of Parliament. The remainder are customarily set forth in the deed; and it is only when both these sources fail, which is not often the case with incorporated companies, that by-laws, votes, usages, and such unsatisfactory repositories, have to be examined. With us, it is far otherwise. We are remitted to the rules and methods of the common law if we wish to discover what in England is discovered by the simple inspection of a general statute, or an almost equally accessible deed of settlement. If we wish to learn the legality of an act of a cashier, we must look to the common law of agency; we must search through a multitude of decisions; we ought to consult the by-laws of the bank, and perhaps even the votes of the directors; and frequently we must seek for evidence of usage among the banks of the same place, and even of the previous usage of the individual bank. All this laborious process often involves inconsistencies and contradictions, and brings us to no sure and safe result. In England, the same doubt, in nine cases out of ten, would be promptly solved by the examination of a few sections of parliamentary acts. The consequences of the respective systems are inevitable. The banks and bankers in England, and the persons dealing with them, conduct their business on a comparatively sound basis of rules, for the most part familiar, or at least easily ascertained. In the United States, precisely the contrary case daily vexes and harasses the merchant. The litigation which we have gone through on the various questions concerning the powers and duties of bank officers has been very extensive, and yet, as already stated, has made but a faint impression on the huge bulk of the subject. In England, they at least

appear to have prospered better. Their system is by no means thoroughly carried out. But the success which has attended the partial initiation of such a scheme furnishes good promise of the advantage which may reasonably be expected to result from its fuller execution. The English love to spend a long time in completing an undertaking; but their leisurely pace has already put them far in advance of ourselves; and the imperfect development of their system, already attained, has brought great benefits to their business community which our merchants still long for in vain. When we established our national banks we might have cured the defect, which, under the previous regime of State banks, could not have been easily managed. We could have done the whole business at a stroke; the opportunity was better than England has ever or will ever enjoy. But our national antipathy to the extension of governmental supervision over the affairs of individuals is answerable, and may long continue answerable, for our neglect of an obvious duty.

This legislation, if it could be effected, would utterly sweep away a custom already widely extended, still rapidly spreading, and daily proving itself to be a perfect hot-bed of litigation. This custom arises from the desire of business men to do for themselves what the government will not do for them; from their effort by the aid of a system of established rules to introduce regularity, uniformity, and certainty into their dealings with each other. With the abolition or desuetude of the ancient system of guilds, the non-professional classes became for a time intermingled in a promiscuous society. But of late, the old taste for segregation has again sprung up in great strength. It appears now in the formation in each considerable city of a "Board," "Exchange," or other species of association, which is in fact little else than a new development of the ancient guild. Such are the "Brokers' Boards,” the "Corn-dealers' Exchanges," and among banks the " Association of the Clearing House." Every such association soon establishes its peculiar code, to govern the dealings of its members inter se. The advantage of belonging to the association, and of adopting its rules, is usually found to be such that the great majority of the brokers, the corn-dealers, the bankers, &c., join their respective fraternities, and recognize and respect their rules in the conduct of their daily affairs. Yet the discrepancy between these merchant-made rules and the rules of law is often great and irreconcilable. As rules,

the courts disregard them. At the trial of a cause they can only be got in as evidence by the indirect course of proving a usage or custom; and the difficulties which beset this mode of introducing and enforcing them are often insuperable. In any other form, however potent they may be in the business world, they are utterly impotent in courts of law. They may be the results of experience, teaching what is convenient or even apparently necessary, yet they may not be good law. Even if they squeeze in under the guise of a usage, this is still liable to be held a usage bad at law. This setting up two tribunals, one of choice and for daily government, the other of necessity and for control in occasional quarrels, the two so often running counter to each other, is a state of affairs much to be deplored and very injurious to the business community. It is hardly open to cure in the cases of boards of brokers, exchanges of corn-dealers, and the like; but it is easily open to perfect cure in the case of banking institutions, themselves in every respect the artificial creation of a statute.

Our exordium has grown to an undue length. But it is because we have reversed the customary order of composition, and have begun with our moral instead of closing with it. We propose in our article to bring together the bulk of the law, which has been laid down in judicial decisions concerning the legal powers and duties of cashiers; and to educe and verify such principles as have been directly enunciated, or indirectly assumed and acted upon, and which in either case may be considered as settled. Speculalations upon the probable decisions to be expected on such questions as are likely to arise, are so apt to prove delusive, that, though the field is tempting, we shall strive not to trespass much upon it. By the same process, we hope to prove and point our moral: which is, briefly, that a few simple sections allotting to each bank officer his respective functions, might with ease and with inestimable advantage be inserted in our National Banking Act. And our object in beginning with our conclusion, so to speak, is, that all our readers in their way through the complications of a legal essay may not fail at each stage to bear in mind the quod erat demonstrandum, and to receive conviction.

It is usually the case that either general legislation, or the charter of the bank, directs or empowers the board of directors to define or limit the powers and duties of the cashier. The National Banking Act contains a provision to this effect, in the following

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