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raERAI. RESERVE BOARIK

s

G O L D S E T T L E M E N T

# U Jf D

of

transactions

for

period ending June

8. 1922.

eserve

of

B s J a a c e l a s t

statement

June 1, 1922.

$ 25,790,516-33

1 1 2 , 8 5 0 , 0 2 6 . 0 6

6 0 , 8 9 8 , 2 3 7 . 0 5

46,947,009.4s

37,919,270.02

28,790,604.00

71,223,425,41

11,153,858.34

21,098,244.08

29,166,146.78

12,850,977.b7

) 2 , 0 9 ) 4 1

Gold

Withdrawals

Gold

'

Deposits

$

14,000,000.00

Aggregate

withdrawals

and

transfers

to

Agent's fund

( CONFIDENT L)

Aggregate

deposits

and

transfers from

Agent's fund

$

14,000,000.00

X - 3 4 3 4

Washington,,

n.-n.

June

9. 1922:

T R A N S F E R S

Debits | Credits

w

York

.

Louis

feas City

n

Francisco

28,200.00

2,200,000.00

3 ^ 1 7 , 4 5 0 . 0 0

55,850.00

430,130.00

118,700.00

176,000.00

305,450.00

440.177.50

4,000,000.00

1,000,000.00

2,000,000.00

1,700.00

3 , 0 0 0 , 0 0 0 . 0 0

3 0 0 . 0 0

2,000,000.00

6,504,200.00

28,200.00

2 » 2 0 £ L 0 0 0 . 0 0

3,217,450.00

5,000,000.00

5,055,850.00

430,130.00

3,000.000.00

118,700.00

176,000.00

3 0 5 , 4 5 0 . 0 0

6,440,177.50

4,000,000.00

6 , 0 0 a , 0 0 0 . 0 0

2,000,000.00

1,700.00

5 , 0 0 0 , 0 0 0 . 0 0

3 0 0 . 0 0

2,000,000.00

10,464,700.00

5 , 0 0 0 , 0 0 0 . 0 0

r

I $491,688,408.93

$

6,971,957.50

1,000,000.

2,000,000.

1,000,000.

1 , 0 0 0 , 0 0 0 . 0

$

3 2 , 5 0 6 , - 2 0 0 - 0 0

$ 2 5 , 9 7 1

,957

- 5 0

$ 43,466,700.00

$ 5 , 0 0 0 , 0 0 0 . 0 0 I I . 5 , 0 0 0 , 0 0 0 . 0

Reserve

leak of

Se1

Net

Debits

Itlements from June Z

indui

Total

Debits

i, 1922 to

June

8, 1<

live.

Total

Credits

Met

Credits

Balance in

food

at

close

of

business

June

8 , 1922.

ekmasry

of

dbar

ship

of

gold

bj

transfers

and t

Decrease

ig»s

in

ownar-

r

banks throogi

wttlemsnta.

Increase

w

York

Loals

n

Francisco

$

25,827,600-98

11,562,411.69

5,326,216.18

2,466,559-42

5 2 2 , 3 8 2 . 9 6

4,953,340-75

2,480,447-78

,

10.996.644-45

$ 134.291,336-51

406,225,976.45

142,647,754-53

1 1 2 , 6 2 0 , 3 0 3 . 5 4

94,013,351.84

40,127,599.01

212,607,994.73

105,133,208-98

28,217,488.70

74,202,035.24

34,^06,824.20

•

55.052,072..

31

$

108,463,535.53

463,306,229-02

131,085,342.84

107,292,087-36

94,950,51^.61

37,661,039-59

212,085,611.77

107,397,246.83

31,175,639.72

6#

̂ 48,694.49

-#,326,376.42

44.9S3.42t.86

$ —

57,080,250-57

937,162.77

2,264,039-85

2,958,351.02

%

13,962,715.35

16^,902,076.63

s i , 1 3 5 , 8 2 5 . 3 6

4 4 , 4 0 1 , 3 4 3 . 3 0

34^56,432.79

2 3 , 2 6 8 , 1 9 4 . 5 8

7 0 , 2 7 2 , 6 1 2 . 4 5

1 5

,417

, 8 9 8 . 1 9

23,937,895-10

2 6 , 0 3 7 , 1 0 6 . 0 3

13.065,079.89

27.919.971.16

25,827,800.98

11,562,411.69

5,328,216.18

2,466,559-42

522,382.96

2,953,340.75

1,480,447.78

9,098.644.4s

$

52,080,250.

1,937,162.

—

2,264,039.

2,958,351.

6 3 , 2 ) 9 , 8 0 4 . 2 1 ( $ 1 , 4 3 9 , 9 4 5 , 9 4 8 . 0 4 1 1 1 , 4 3 9 ,

9 4 5 ,

9 4 8 . 0 4 1$ 6 j ,2 )9 , 8 0 4 .21

I$509,177,151-43

t* .

59,239,804.21

$ 5 9 , 2 3 9 , 9 %

•

7/17/2019 frsbog_mim_v16_0684.pdf


F E D E R A L R E S E R V E A G E N T S * F U N D

r y o f transactions for period, ending June 8

Agent

at

Balance last

statement

June 1, 1922.

Gold

Withdrawals

_ 1 2 2 2 t

Gold

Deposits

Withdrawals

for

transfers

to hank

Deposits

through

transfers

from bank

(CONFIDENTIAL)

Total

Withdrawals

Total

Deposits

X - 3 1 + 3 1 + a

Washington, D, C»

June 9, 1922.

Balance at

close of

business

June

8.

1922*

Francisco

116,000,000

401,000,000

141,389,260

150,000,000

50,795,000

90,000,000

342,644,500

46,500,000

16,000,000

4 5 , 3 6 0 , 0 0 0

10,000,000

184,046,500

$

5 , 0 0 0 , 0 0 0

7 , 0 0 0 , 0 0 0

$

1,000,000

5 , 0 0 0 , 0 0 0

5 , 0 0 0 , 0 0 0

5 , 0 0 0 , 0 0 0

I

2 , 0 0 0 , 0 0 0 i 3 , 0 0 0 , 0 0 0

I

I

3 , 9 6 0 , 5 0 0 I 6 , 0 0 0 , 0 0 0

5 , 0 0 0 , 0 0 0

5 , 0 0 0 , 0 0 0

2,000,000

1 0 , 9 6 0 , 5 0 0

5 , 0 0 0 , 0 0 0

6,000,000

3 , 0 0 0 , 0 0 0

6,000,000

118,000,000

401,000,000

141,389,260

1 4 5 , 0 0 0 , 0 0 0

55,795,000

9 6 , 0 0 0 , 0 0 0

337,644,500

4 7 , 3 0 0 , 0 0 0

16,000,000

4 5 , 3 6 0 , 0 0 0

10,000,000

179,086,000

1$ 1 , 5 9 5 , 5 3 5 , 2 6 0 1 $ 1 2 , 0 0 0 , 0 0 0 | $ . 1 , 0 0 0 , 0 0 0 | $ 1 0 , 9 6 0 , 5 0 0 1 $ 1 9 , 0 0 0 , 0 0 0 , 1$ 2 2 , 9 6 0 , 5 0 0 | $ 2 0 , 0 0 0 , 0 0 0 | $ 1 , 5 9 2 , 5 7 4 , 7 6 0

O i

CK

7/17/2019 frsbog_mim_v16_0684.pdf


X - 3 4 3 5 a

N O . 3 1 5 7 A T L A W

I N T H E D I S T R I C T C O U R T O F T H E U N I T E D S T A T E S F O R

T H E

N O R T H E R N D I S T R I C T

O F

T E X A S ,

A T

D A L L A S

F e d e r a l R e s e r v e B a n k o f D a l l a s , P l a i n t i f f ,

v .

C i t y o f C l e b u r n e , D e f e n d a n t .

P L A I N T I F F ' S B R I E F O N T H E Q U E S T I O N O F J U R I S D I C T I O N

T h i s s u i t w a s i n s t i t u t e d b y t h e p l a i n t i f f t o r e c o v e r

t h e c o n t e n t s o f c e r t a i n w a r r a n t s e x c e e d i n g t h e j u r i s d i c t i o n a l

a m o u n t i s s u e d b y t h e d e f e n d a n t t o t h e o r d e r o f d i v e r s a n d

s u n d r y c i t i z e n s

o f t h e

S t a t e

o f

T e x a s

a n d b y

t h e m a s s i g n e d

t o

t h e p l a i n t i f f .

T h e d e f e n d a n t c o n t e n d s t h a t t h i s c o u r t i s w i t h o u t

j u r i s d i c t i o n

o f t h e

s u i t .

I t

b a s e s t h a t c o n t e n t i o n u p o n

t h e

e x i s t e n c e o f t h a t p a r t o f t h e f i r s t p a r a g r a p h o f S e c t i o n 2 U o f

t h e J u d i c i a l C o d e w h i c h r e a d s :

N o d i s t r i c t c o u r t s h a l l h a v e c o g n i z a n c e o f a n y s u i t ( e x c e p t

u p o n f o r e i g n b i l l s o f e x c h a n g e ) t o r e c o v e r u p o n a n y p r o m -

i s s o r y n o t e s o r o t h e r c h o s e i n a c t i o n i n f a v o r o f a n y a s s i g n -

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- 2 -

X - 3 ^ 3 5 a

e a , o r o f a n y

s u b s e q u e n t h o l d e r

i f

s u c h i n s t r u m e n t

b e

p a y a b l e

t o

b e a r e r

a n d b e n o t

m a d e

b y a n y

c o r p o r a t i o n , u n l e s s s u c h s u i t

m i g h t h a v e b e e n p r o s e c u t e d i n s u c h c o u r t t o r e c o v e r u p o n s a i d

n o t e o r o t h e r c h o s e i n a c t i o n i f n o a s s i g n m e n t h a d b e e n m a d e .

T h e c o n t e n t i o n o f t h e p l a i n t i f f i s t h a t t h i s s u i t a r i s e s u n d e r

a l a w o f t h e U n i t e d S t a t e s a n d t h a t t h e p r o v i s i o n a b o v e q u o t e d a n d h e r e -

i n a f t e r r e f e r r e d

t o a s t h e

a s s i g n e e c l a u s e a p p l i e s o n l y

t o

c a s e s

i n

w h i c h

a n

a l i e n s u e s

a

c i t i z e n

o r i n

w h i c h

a

c i t i z e n

o f

a n o t h e r s t a t e

s u e s a c i t i z e n o f t h e s t a t e i n w h i c h t h e a c t i o n i s b r o u g h t , a n d t h a t i t

h a s n o a p p l i c a t i o n t o a c a s e a r i s i n g u n d e r a l a w o f t h e U n i t e d S t a t e s .

T h a t t h i s c a s e i s o n e a r i s i n g u n d e r a l a w o f t h e U n i t e d

S t a t e s h a s b e e n d i s t i n c t l y d e c i d e d i n A m e r i c a n B a n k & T r u s t C o . v .

F e d e r a l R e s e r v e B a n k o f A t l a n t a , 2 ^ 6 U . S . , 4 l S u p . C t . B e p .

4 9 9 * T h e p l a i n t i f f m a i n t a i n s t h a t t h e l e g i s l a t i v e h i s t o r y a n d j u d i c i a l ,

c o n s t r u c t i o n

o f t h e

a s s i g n e e c l a u s e u n m i s t a k a b l y s h o w t h a t

i t h a s n o

a p p l i c a t i o n t o a c a s e a r i s i n g u n d e r a l a w o f t h e U n i t e d S t a t e s , a n d

f u r t h e r t h a t t h e a s s i g n e e c l a u s e , a s i t n o w a p p e a r s i n S e c t i o n 2 4 o f

t h e J u d i c i a l C o d e , d o e s n o t c h a n g e t h e o p e r a t i o n o f t h a t c l a u s e a s i t

e x i s t e d i n t h e A c t o f 1 8 8 8 . T h e a s s i g n e e c l a u s e w a s e m b o d i e d i n t h e

o r i g i n a l J u d i c i a r y A c t o f 1 7 8 9 a n d h a s b e e n b r o u g h t f o r w a r d i n s u b s t a n c e

i n v a r y i n g p h r a s e o l o g y t h r o u g h a l l s u b s e q u e n t e n a c t m e n t s a n d r e v i s i o n s .

T h e o r i g i n a l J u d i c i a r y A c t o f 1 7 8 9 » 1 U . S . S t a t . 7 2 e t s e q . , d i d n o t

v e s t j u r i s d i c t i o n o v e r c a s e s a r i s i n g u n d e r t h e C o n s t i t u t i o n o r l a w s o f

t h e U n i t e d S t a t e s , b u t b y S e c t i o n 1 1 t h e r e o f t h e j u r i s d i c t i o n w a s c o n -

f i n e d t o t h r e e c l a s s e s o f c a s e s : 1 . 7 / h e r e t h e U n i t e d S t a t e s a r e p l a i n -

t i f f s ; 2 . W h e r e a n a l i e n i s a p a r t y ; 3 « t T h e r e t h e s u i t i s b e t w e e n a

7/17/2019 frsbog_mim_v16_0684.pdf


- 3 -

x - 3 4 3 5 a

c i t i z e n o f t h e s t a t e w h e r e t h e s u i t i s b r o u g h t a n d a c i t i z e n o f a n o t h e r

s t a t e .

B y t h e A c t o f F e b r u a r y 1 3 , 1 8 0 1 , c . 4 , S e c . 1 1 , 2 S t a t . 8 9 , j u r i s -

d i c t i o n o v e r s u i t s a r i s i n g u n d e r

t h e

C o n s t i t u t i o n

a n d

l a w s

o f t h e

U n i t e d

S t a t e s w a s v e s t e d , b u t b y t h e A c t o f M a r c h S , 1 8 0 2 , 2 U . S . S t a t . I 3 2 ,

t h e A c t o f

F e b r u a r y

1 3 , 1 8 0 1 , w a s

r e p e a l e d

a n d t h e

o r i g i n a l J u d i c i a r y

A c t

r e v i v e d , s o t h a t t h e j u r i s d i c t i o n o v e r c a s e s a r i s i n g u n d e r t h e C o n s t i t u t i o n

a n d

l a w s

o f t h e

U n i t e d S t a t e s

w a s

b r o a d l y e x e r c i s e d

f o r t h e

f i r s t t i m e

b y t h e A c t o f M a r c h 3 , 1 8 7 5 , c . 1 3 7 , s e c , 1 , 1 8 S t a t . 4 7 0 .

R e v e r t i n g

t o t h e


A c t , i t w a s

d i s t i n c t l y h e l d

b y J u s t i c e S t o r y , a t c i r c u i t , t h a t t h e a s s i g n e e c l a u s e w a s w i t h o u t a p -

p l i c a t i o n t o a s u i t b y t h e U n i t e d S t a t e s , a s a s s i g n e e , t o r e c o v e r t h e

c o n t e n t s

o f a

p r o m i s s o r y n o t e a g a i n s t

t h e

m a k e r , a l t h o u g h

t h e

m a k e r

a n d

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s t r i c t i o n c o n t a i n e d

i n t h e

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b e i n g

t h e

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c l a u s e i n q u e s t i o n , w a s n o t i n t e n d e d t o a p p l y t o a s u i t b r o u g h t b y t h e

U n i t e d S t a t e s . U n i t e d S t a t e s v . G r e e n e , 4 M a s o n 4 2 7 , 2 6 F e d . C a s e s N o .

1 5 , 2 5 8 .

I t t h e r e f o r e a p p e a r s t h a t t h e a s s i g n e e c l a u s e , a s e m b o d i e d

i n t h e o r i g i n a l J u d i c i a r y A c t , w a s c o n f i n e d i n i t s o p e r a t i o n t o t h e r e -

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t h e

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i n t e n t

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a n d a

c o n s i d e r a -

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b y i t s

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A c t d i d n o t

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c a s e s a r i s i n g u n d e r t h e l a w s o f t h e U n i t e d S t a t e s , a n d i t w a s , t h e r e -

f o r e , p r o p e r l y h e l d ,

i n t h e

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o f t h e


v .

D e v e a u x ,

5

C r a n c h

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v .

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5

P e t e r s 4 7 9 , t h a t t h e b a n k c o u l d n o t m a i n t a i n a n a c t i o n i n t h e f e d e r a l

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t h e

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i n

t h o s e c a s e s w o u l d h a v e b e e n

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c o n t r a r y

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A c t

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a s t h e

J u d i c i a l

C o d e n o w c o n f e r s , j u r i s d i c t i o n o v e r c a s e s a r i s i n g u n d e r t h e l a w s o f t h e

U n i t e d S t a t e s .

T h e r e a f t e r

t h e

s e c o n d B a n k

o f t h e


w a s

i n c o r p o r a t e d

b y A c t o f

C o n g r e s s

a n d i t s

c h a r t e r e x p r e s s l y c l o t h e d

i t

w i t h

t h e

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i n

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9

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7 3 5 ,

t h a t

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t h e

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C o n g r e s s , u n d e r

t h e

C o n s t i t u t i o n ,

t o

c o n f e r j u r i s d i c t i o n

o n t h e

f e d e r a l c o u r t s

o f a

s u i t

b y t h e

b a n k ,

a s

s u c h

a

s u i t

w a s o n e

a r i s i n g

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t h e

C o n s t i t u t i o n ,

a n d

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t h e

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a n

a c t i o n

i n t h e

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T h e

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i n t h e

c h a r t e r

o f t h e

b a n k

t h a t

i t

m i g h t

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w a s b u t t h e

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a t

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o f

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t h e

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o f

t h e

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a n d h a d t h e


A c t

c o n f e r r e d t h a t


t h e

s p e c i a l p r o v i s i o n

i n t h e

b a n k ' s c h a r t e r a u t h o r i z i n g

i t t o s u e i n t h e f e d e r a l c o u r t w o u l d h a v e b e e n w h o l l y u n n e c e s s a r y .

I n

C o m m e r c i a l N a t i o n a l B a n k

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6 F e d .

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r e c o v e r

t h e

c o n t e n t s

o f

n o t e s p a y a b l e

t o

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. c o o

- 5 - x-3^35a

and. assigned by citizens of the state where the suit was brought to

the plaintiff, and it was contended there, as it is contended here,

that the "assignee clause" defeated the jurisdiction, but the court

held otherwise.

Again,

in The

Bank

of the

United States

v. The

Planters' Batik

of Georgia, 9 iheaton 904, Chief Justice Marshall held that the bank,

despite the "assignee clause", could maintain an action on notes

assigned to it by citizens of the State of Georgia in which the action

was brought * It clearly appears from the opinion in that case that the

court construed the "assignee clause" to be confined in its application

to

cases

in

which

the

jurisdiction rested solely

on

diverse citizenship.

In the course of the opinion Chief Justice Marshall, inquiring

whether the "assignee clause" defeated the jurisdiction, pertinently

said:

It does not sue because the defendant is a citizen of a

different state from any of its members, but because its

charter confers upon it the right of suing its debtors in

a circuit court of the United States.

If the bank could not sue a person who was & citizen of the

same state with any one of its members, in the circuit

court, this disability would defeat the power. There is,

probably, not a commercial State in the Union, some of

whose citizens are not members of the Bank of the United

States. There is, consequently, scarcely a debt due to

the bank, for which a suit could be maintained in the federal

court, did the jurisdiction of the court depend on citizenship.

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- 6 -

x - 3 U 3 5 a

A g e n e r a l p o w e r t o s u a i n a n y c i r c u i t c o u r t o f t h e U n i t e d -

S t a t e s , e x p r e s s e d

i n

t e r m s o b v i o u s l y i n t e n d e d

t o

c o m p r e h e n d

e v e r y c a s e , w o u l d t h u s

b e

c o n s t r u e d

t o

c o m p r e h e n d

n o

c a s e .

S u c h a c o n s t r u c t i o n c a n n o t b e t h e c o r r e c t o n e .

H e r e t h e p l a i n t i f f d o e s n o t s u e b e c a u s e t h e d e f e n d a n t i s

a

c i t i z e n

o f a

d i f f e r e n t s t a t e ,

b u t

b e c a u s e

i t s

c h a r t e r ,

i n

v i r t u e

o f

a n A c t o f C o n g r e s s , c o n f e r s u p o n i t t h e r i g h t o f s u i n g i t s d e b t o r s i n

t h e

f e d e r a l c o u r t u n d e r t h a t p r o v i s i o n

o f

S e c t i o n

2 4 o f t h e

J u d i c i a l

C o d e w h i c h v e s t s j u r i s d i c t i o n

i n

t h i s c o u r t

n o t c f

s o m e

b u t o f a l l


t h e

l a w s

o f t h e

U n i t e d S t a t e s . H e n c e

i t i s

c l o t h e d ,

b y v i r t u e o f i t s c h a r t e r a n d t h e j u r i s d i c t i o n a l p r o v i s i o n a b o v e r e f e r r e d

t o ,

w i t h

t h e

g e n e r a l p o w e r

t o s u e i n t h e

c o u r t s

o f t h e


a n d

t h a t p o w e r

i s , a s

s a i d

b y

C h i e f J u s t i c e M a r s h a l l , e x p r e s s e d

i n

t e r m s o b v i o u s l y i n t e n d e d

t o

c o m p r e h e n d e v e r y c a s e ,

a n d t o

c o n s t r u e

i t

a s

c o n t e n d e d

f o r b y t h e

d e f e n d a n t h e r e i n w o u l d m a k e

i t

c o m p r e h e n d

n o

c a s e .

A s

t h i s c a s e a r i s e s u n d e r

a l a w o f t h e


t h e

m a t t e r

o f

c i t i z e n s h i p

i s

i m m a t e r i a l »

I n

C o m m e r c i a l N a t i o n a l B a n k

v .

S i m m o n s ,

s u p r a , W a l k e r , D i s t r i c t J u d g e , s a i d :

I f t h e

m a t t e r

o f

c i t i z e n s h i p ,

i n

r e f e r e n c e

t o t h e

n a t i o n a l

b a n k s ,

i s

d i s p e n s e d w i t h

i n

f a v o r

o f

s u c h b a n k s , t h e n w h a t

r e a s o n i s t h e r e f o r t h e a p p l i c a t i o n o f t h e l i m i t a t i o n , a s t o

s u i t s

o n

a s s i g n e d p a p e r ? T h a t l i m i t a t i o n

i s

o n l y a t t a c h e d

t o

e n f o r c e

t h e

p r i v i l e g e s

o f


a n d t o

p r e v e n t

i t s

a b u s e

i n

b r i n g i n g s u i t s

i n

f e d e r a l c o u r t s .

A n d ,

f u r t h e r ,

t h e

b a n k s ,

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< ~ r , o

x „ . •

A

7 X 3433a

i n p u r c h a s i n g n o t e s , e t c . , a r e o n l y d o i n g w h a t t h e l a w

a u t h o r i z e s t h e m t o d o .

T h i s u n m i s t a k a b l y s h o w s t h a t t h e r e s t r i c t i o n o f t h e a s s i g n e e

c l a u s e a p p l i e s o n l y t o t h e m a t t e r o f c i t i z e n s h i p a n d t h a t i t w a s n e v e r

d e s i g n e d t o e x t e n d t o a c a s e a r i s i n g u n d e r a l a w o f t h e U n i t e d S t a t e s .

A g a i n ,

t h e

c o m m e n t

o f

J u d g e » 7 e l k e r t h a t t h e * b a n k s

i n

p u r c h a s i n g n o t e s

a r e d o i n g o n l y w h a t t h e l a w a u t h o r i z e s t h e m t o d o , i s p e r t i n e n t h e r e .

T h e c h a r t e r o f t h e p l a i n t i f f a u t h o r i z e s i t t o d e a l i n a n d t o a c q u i r e

s u c h p a p e r a s t h a t u p o n w h i c h t h i s s u i t i s b a s e d , a n d i t i s m a t t e r o f

c o m m o n , a n d t h e r e f o r e j u d i c i a l k n o w l e d g e t h a t t h e a s s e t s o f a l l t h e

F e d e r a l R e s e r v e B a n k s c o n s i s t l a r g e l y o f n o t e s a n d o t h e r c h o s e s i n

a c t i o n a s s i g n e d t o t h e m b y c i t i z e n s o f t h e S t a t e s i n w h i c h t h e y a r e

l o c a t e d - F r o m t h i s i t f o l l o w s t h a t t h e c o n s t r u c t i o n c o n t e n d e d f o r b y

t h e d e f e n d a n t i n t h i s c a s e w o u l d d e p r i v e t h e F e d e r a l R e s e r v e B a n k s o f

t h e r i g h t t o s u e t h e m a j o r i t y , i f n o t a l l , o f t h e i r d e l i n q u e n t d e b t o r s

i n t h e f e d e r a l c o u r t . S u c h a c o n s t r u c t i o n w o u l d b e s u b v e r s i v e o f b o t h

t h e l e t t e r a n d t h e s p i r i t o f t h e l a w t h a t e x p l i c i t l y c o n f e r s j u r i s d i c -

t i o n

o f a l l


t h e

l a w s

o f t h e

U n i t e d S t a t e s .

T h e a s s i g n e e c l a u s e d o e s n o t o p e r a t e t o d e f e a t j u r i s d i c t i o n

u n l e s s t h e c a s e c o m e s b o t h w i t h i n i t s l e t t e r a n d i t s i n t e n t , I f i t

s h o u l d

b e

c o n c e d e d t h a t t h i s c a s e c o m e s w i t h i n

t h e

l e t t e r

o f t h e

a s s i g n e e c l a u s e , y e t i t i s e q u a l l y o b v i o u s t h a t i t d o e s n o t c o m e w i t h i n

i t s i n t e n t .

A s s a i d b y J u s t i c e S t o r y , i n U n i t e d S t a t e s v . G r e e n e , s u p r a i n

d i s c u s s i n g t h e a s s i g n e e c l a u s e ;

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-S- x

-3l+35a

• '<->

The terms of this latter clause are exceedingly broad

and

strong,

'nor

shall

any

district

or

circuit court have

cognizance', etc.; and if they are to be understood with-

out any limitation whatsoever, they clearly extend to the

present case."

B u t ,

s a i d J u s t i c e S t o r y :

It was

foreseen, that

if no

restriction

of

this nature were

interposed, the jurisdiction of the courts of the United

States might,

by

fraudulent

or

friendly assignments,

be

extended to almost all classes of contracts between citizens

of the

same state. This would

be a

,manifest evasion

of the

Constitution in its limits upon the .judicial power. This

was the mischief to be remedied. But the case of the gov-

ernment is not within the mischief. It is not presumable.

that

the

government would countenance

a

fraud

of

this nature,"

It

csumot

be

presumed that

the

Federal Reserve Banks, which

essentially

are

great governmental agencies

and in

which

the

govern-

ment itself has a direct pecuniary interest, would indulge the practice

of

obtaining choses

in

action

by

"fraudulent

or

friendly assignments"

for the improper purpose of wrongfully conferring jurisdiction where

it did not

rightfully exist.

The

institution,

in

this court

of a

suit

arising under a law of the United States cannot constitute a mischief

because

the

institution

and

maintenance

of

such

a

suit

is

expressly

permitted

by the

Constitution

and the

existing

law.

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f O c i

-9- X-3^35a

In New

Orleans

v.

Whitney, Administrator,

I38 U. S.

595, the co-art entertained jurisdiction of suit on a chose in

action

by an

administrator, saying:

T h e

e v i l w h i c h

t h e l a w w a s

i n t e n d e d

t o

o b t f i a t e

w a s t h e

v o l u n t a r y c r e a t i o n

o f

f e d e r a l . j u r i s d i c t i o n

b y

s i m u l a t e d

a s s i g n m e n t s . A s s i g n m e n t s b y o p e r a t i o n o f l a w , b y

c r e a t i n g l e g a l r e p r e s e n t a t i v e s ,

a r e n o t

w i t h i n

t h e m i s -

c h i e f

o r

r e a s o n

o f t h e l a w .

In

Lipschitz

v.

Napa Fruit

Co., 223 Fed. 701, the

Circuit Court

of

Appeals

for the

Second Circuit,

in

discussing

the "assignee clause", said:

T h e i n t e n t o f t h e s t a t u t e w a s t o p r e v e n t c i t i z e n s o f

t h e

s a m e s t a t e f r o m c r e a t i n g

a

d i v e r s i t y

o f


b y

a s s i g n m e n t ,

a n d

f r o m t h e r e b y c o n f e r r i n g u p o n

t h e

a s s i g n -

e e b y

i n d i r e c t i o n

a

r i g h t

t o s u e i n t h e

c o u r t s

o f t h e

U n i t e d S t a t e s w h i c h o t h e r w i s e

h e

w o u l d

n o t

h a v e p o s s e s s e d .

In

Holmes

v.

Goldsmith,

l4 j U. S. 160, the

court said:

It is quite plain that the plaintiff's action did not

offend

the

spirit

and

purpose

of

this section

of the Act.

The purpose of the restriction as to suits by assignees

was to prevent the making of assignments of choses in

action for the purpose of giving .jurisdiction to the

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-10- -3345a

f e d e r a l c o u r t .

I n t h a t c a s e t h e j u r i s d i c t i o n , t h o u g h r e s t i n g s o l e l y

o n

d i v e r s e c i t i z e n s h i p ,

w a s

s u s t a i n e d b e c a u s e

i t w a s

s h o w n t h a t

t h e

n o m i n a l e n d o r s e r

w a s n o t

r e a l l y s u c h ,

a n d

t h a t

t h e

n o t e

w a s

m a d e

b y t h e m a k e r s f o r h i s a c c o m m o d a t i o n a n d a s h i s s u r e t i e s .

N u m e r o u s o t h e r c a s e s o f s i m i l a r i m p o r t m a y b e r e a d i l y

c i t e d , h u t t h e f o r e g o i n g e x c e r p t s i n d i s p u t a b l y e v i d e n c e t h e f a c t

t h a t t h i s c a s e i s i n d i s p u t a b l y w i t h o u t t h e m i s c h i e f o r t h e p u r v i e w

o f t h e

i n h i b i t i o n

o f t h e

a s s i g n e e c l a u s e .

T h e r e

a r e t w o

c l a s s e s

o f

f e d e r a l j u r i s d i c t i o n :

O n e

i s d e p e n d e n t u p o n t h e c h a r a c t e r o f t h e p a r t i e s , a n d t h e o t h e r u p o n

t h e c h a r a c t e r o f t h e s u b j e c t m a t t e r . T h e s e a r e t - v o d i s t i n c t c o n -

c e p t i o n s

a n d

t h i s c a s e d o e s

n o t

d e p e n d

o n t h e

c h a r a c t e r

o f t h e

p a r t i e s , b u t i s g o v e r n e d b y t h e s u b j e c t m a t t e r .

In

Cohens

v.

Virginia,

6

Eheaton

264,

393» Chief Justice

Marshall said:

I n o n e d e s c r i p t i o n o f c a s e s , t h e j u r i s d i c t i o n o f t h e

c o u r t

i s

f o u n d e d e n t i r e l y

o n t h e

c h a r a c t e r

o f t h e

p a r t i e s ;

a n d t h e

n a t u r e

o f t h e

c o n t r o v e r s y

i s n o t

c o n t e m p l a t e d

b y

t h e c o n s t i t u t i o n . T h e c h a r a c t e r o f t h e p a r t i e s i s e v e r y -

t h i n g , t h e n a t u r e o f t h e c a s e n o t h i n g . I n t h e o t h e r d e -

s c r i p t i o n o f c a s e s t h e j u r i s d i c t i o n i s f o u n d e d e n t i r e l y

o n t h e c h a r a c t e r o f t h e c a s e , a n d t h e p a r t i e s a r e n o t

c o n t e m p l a t e d b y t h e c o n s t i t u t i o n . I n t h e s e t h e n a t u r e o f

t h e

c a s e

i s

e v e r y t h i n g ,

t h e

c h a r a c t e r

o f t h e

p a r t i e s

n o t h i n g .

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v . 3 4 3 5 a

- 1 1 -

The

jurisdiction

of

this suit, therefore,

is

dependent

upon

its

character,

to wit: one

arising under

a law of the

United States,

and is in no way

concerned with

the

character

of

the

parties.

The contention of the defendant is further confronted

with this insuperable objection.

In

pursuance

of the

Constitution

Congress

has

explicitly clothed this court with jurisdiction

of all

suits

at

common

law or in

equity that involve

the

requisite

jurisdictional amount

and

that arise under

the

laws

of the

United

States. This jurisdiction will not be held to be taken away by

any subsequent words of the statute, although appropriate for

that purpose, unless

it

shall clearly appear that such

was the

manifest intent

of

Congress.

The

reasoning

of

Justice Story,

in

United States

v.

Greene, supra, whilst applying with peculiar force

to the

government,

is

nevertheless applicable here.

In the

course

of

that opinion Justice Story said:

"Here

the

.jurisdiction

is

clearly given

by the

words

of the

9th

section,

and it is

incumbent upon those

who

assert

that

it is

restrained

by

another section,

to

establish

the

fact beyond all doubt. To show that the subsequent words

may be so

applied,

is not

sufficient:

it

must

be

shown

that they were actually used

for

such

a

purpose."

The

"assignee clause"

was

inserted

in the

original

Judiciary

Act, and

that

at a

time when

it was not

possible

for

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- 1 2 -

. X - 3 U 3 5 a

it to operate upon suits arising under the Constitution or the

laws of the United States, because at that time such juris-

diction had not been conferred, nor, if we eliminate the

ephemeral existence of the Act of February 1), 1801, was it

conferred until the Act of March 3> 1875 I t is therefore in-

disputable that Congress in the original enactment of the

"assignee clause" designed that it should operate only on

suits in which the jurisdiction was founded either upon alienage

or diverse citizenship. The "assignee clause", in the Act of

1 8 8 7 ,

a s

corrected by the Act of 1888, which is embodied in

Section 629 of the Revised Statutes, is set forth in a proviso

following the grant of jurisdiction in cases in which an alien

is a

party

or the

suit

is

between

a

citizen

of the

state where

it is brought and a citizen of another state. That act is as

follows:

The circuit courts shall have original jurisdiction as

follows:

First.

Of all

suits

of a

civil nature

at

common

law or in

equity, where

the

matter

in

dispute, exclusive

of

costs

exceeds the sum or value of five hundred dollars, and an

alien is a party, or the suit is between a citizen of the

State where it is brought and a citizen of another State:

Provided. That no circuit court shall have cognizance of

any suit to recover the contents of any promissory note or

other chose in action in favor of an assignee, unless a

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X - > 3 5 a

- 1 3 -

suit might have been prosecuted in such court to recover

the said contents if no assignment bad been made, except

in cases of foreign bills of exchange."

The connection of the clause in question in the stat-

ute above quoted unmistakably shows that its operation was

restricted to the two classes of cases antecedently specified.

Again, the "assignee clause" is therein embodied in a proviso,

and it is familiar learning that the office of a proviso,generally,

is either to except something from the -enacting clause, or to

qualify or restrain its generality, or to exclude some possible

ground of misinterpretation of it as extending to cases not

intended by the Legislature to be brought within its purview.

Where

the

enacting clause

is

general

in its

language

and

object.

and a

proviso

is

afterwards introduced, that proviso

is

construed

strictly and takes no case out of the enacting clause which does

not fall fairly within its terms. j.n short, a proviso carves

special exceptions only out of the enacting clause, and those

who set up any such exception must establish it as being; within

the reason thereof. Such is the text of the article entitled

"Statutes

&

Statutory Construction"

in 1 Fed,

Stat. Anno.

2

ed., p. 153» and. that text is supported by a wealth of

citations from the ultimate tribunal.

The defendant cannot parry the force of this settled

rule of construction by pointing out that the "assignee clause",

as it now appears in Section 24 of the Judicial Code, is

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—14—

x - 3 4 3 %

099

differently arranged and set forth in a separate and distinct

sentence. Such fact can exert no potent influence here because

the Judicial Code, both by its express provisions and by

settled judicial construction, is not a new enactment but a mere

continuation,

and

neither

a

mere change

in

arrangement

nor an

unimportant change of phraseology operates a change of the law.

Section 294 of the Judicial Code reads:

The

provisions

of

this

Act, so far as

they

are

substantially

the same as existing statutes, shall be construed as con-

tinuations thereof, and not as new enactments, and there

shall be no implication of a change of intent by reason of

a change of words in such statute, unless such change of

intent shall be clearly manifest."

Section 295 of the Judicial'Code reads:

The

arrangement

and

classification

of the

several sections

of this Act have been made for the purpose of a more con-

venient and orderly arrangement of the same, and therefore

no

inference

or

presumption

of a

legislative construction

is to be drawn by reason of the chapter under which any ,

particular section is placed."

It is familiar learning that in the construction of

the

Revised Statutes

the

presumption

is

against

an

intention

to

change the meaning and construction of a statute re-enacted

therein. Mere changes in phraseology arising from a condensa-

tion or otherwise are not to be regarded as changing the pre-

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- 1 5 -

e x i s t i n g l a w . N o r i s i t t o b e i n f e r r e d t h a t C o n g r e s s , b y

c o n s o l i d a t i n g o r t r a n s p o s i n g e a r l i e r p r o v i s i o n s , i n t e n d e d t o

c h a n g e t h e i r e f f e c t , u n l e s s a n i n t e n t i o n t o d o s o i s c l e a r l y

e x p r e s s e d . A c h a n g e o f t h e l a w b y a r e v i s i o n w i l l n o t b e

p r e s u m e d - u n l e s s t h e l a n g u a g e i n t h e r e v i s i o n c a n n o t p o s s i b l y

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e m b o d i e d i n t h e . o r i g i n a l J u d i c i a r y A c t w h i c h , a s w e h a v e s t a t e d ,

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d i d n o t

c o n f e r j u r i s d i c t i o n

o f a n y

c a s e a r i s i n g t i n d e r

t h e

C o n s t i -

t u t i o n o r t h e l a w s o f t h e U n i t e d S t a t e s . J u s t i c e S t o r y , i n h i s

o p i n i o n i n U n i t e d S t a t e s v . G r e e n e , s u p r a , w h i c h h a s n e v e r b e e n

q u e s t i o n e d , d i s t i n c t l y d e c i d e d t h a t t h e a s s i g n e e c l a u s e d i d

n o t

a p p l y

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s u i t

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a s

a s s i g n e e ;

a n d

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W e l k e r , i n h i s o p i n i o n i n C o m m e r c i a l N a t i o n a l B a n k v . S i m m o n s ,

s u p r a , w h i c h

h a s

n e v e r b e e n q u e s t i o n e d , d e c i d e d t h a t

i t d i d n o t

a p p l y t o t h e c a s e o f a n a t i o n a l b a n k w h o s e c h a r t e r a u t h o r i z e d

i t t o s u e i n t h e f e d e r a l c o u r t ,

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i t

e n a c t e d

t h e


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t h a t

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w a s n o t

i n t e n d e d t o a f f e c t t h e j u r i s d i c t i o n o f c a s e s o t h e r t h a n t h o s e

r e s t i n g s o l e l y o n d i v e r s e c i t i z e n s h i p . T h e r e f o r e t h e o r i g i n a l

i n t e n t o f t h e a s s i g n e e c l a u s e w a s t o o n l y p r e s c r i b e a n

a d d i t i o n a l r e q u i s i t e o f d i v e r s i t y o f c i t i z e n s h i p . S u c h m a n i f e s t -

l y w a s i t s o r i g i n a l i n t e n t , a n d n o t h i n g h a s t r a n s p i r e d s i n c e

t h a t t i m e t o e v i d e n c e a c h a n g e o f t h a t i n t e n t . I n f a c t , W y m a n

v . W a l l a c e , s u p r a , c o n c l u s i v e l y s h o w s t h a t s u c h i s n o w t h e i n t e n t

o f t h e

e n a c t m e n t .

T h e F i r s t B a n k o f t h e U n i t e d S t a t e s , d e s p i t e t h e

a s s i g n e e c l a u s e , c o u l d h a v e m a i n t a i n e d a n a c t i o n , a s a s s i g n e e ,

i n t h e

f e d e r a l c o u r t

h a d

t h o s e c o u r t s

a t

t h a t t i m e b e e n v e s t e d

w i t h j u r i s d i c t i o n

o f


t h e

l a w s

o f t h e

U n i t e d

S t a t e s ; a n d t h e s p e c i a l p r o v i s i o n i n t h s c h a r t e r o f S e c o n d

B a n k o f t h e U n i t e d S t a t e s a u t h o r i z i n g i t t o s u e i n t h e f e d e r a l

c o u r t w o u l d h a v e b e e n w h o l l y u n n e c e s s a r y

h a d t h e

f e d e r a l c o u r t s

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— 2 2 —

X - 3 U 3 5 3

a t t h a t t i m e b e e n v e s t e d w i t h j u r i s d i c t i o n o f c a s e s i n v o l v i n g

f e d e r a l q u e s t i o n s *

T h e

c h a r t e r

o f t h e

F e d e r a l R e s e r v e B a n k p l u s

t h e

j u r i s d i c t i o n o f a l l c a s e s a r i s i n g u n d e r t h e l a w s o f t h e U n i t e d

S t a t e s

i s t h e

e x a c t e q u i v a l e n t

o f t h e

c h a r t e r

o f t h e

S e c o n d B a n k

o f t h e


a n d ,

t h e r e f o r e ,

t h e

d e c i s i o n s

o f

C h i e f

J u s t i c e M a r s h a l l ,

i n T h e

B a n k

o f t h e


v . T h e

P l a n t e r s

v

B a n k

o f

G e o r g i a ,

a n d

J u d g e ^ e l k e r ,

i n

C o m m e r c i a l

N a t i o n a l B a n k

v .

S i m m o n s , s u p r a ,

a r e n o t

o n l y a p p l i c a b l e

ut conclusive.

I t i s

t h e r e f o r e r e s p e c t f u l l y s u b m i t t e d t h a t ,

a s t h e


o f

t h i s c a s e r e s t s u p o n

t h e

f a c t t h a t

i t i s a

s u i t a r i s i n g u n d e r t h e l a w s o f t h e U n i t e d S t a t e s , t h i s c o u r t

h a s j u r i s d i c t i o n .

R e s p e c t f u l l y s u b m i t t e d ,

C M S . C .

H U F F ,

E . B .

S T R O U D ,

E T H E R I D G E , M c C O R M I C K & B R O M B E R G ,

A t t o r n e y s

f o r

P l a i n t i f f .

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