When not defined by a board of direc tors the duties of the president and cashier are only such as may be incident to their offices respectively in their very nature, in the absence of anything to the contrary in the act of incorporation ; /lodge's Ex'r v. Bank, 22 Grad. (Va.) 58. Neither of these officers, nor both acting together, can give up a debt or liability to the bank, nor make any admissions which would release the maker of a note due to the bank from his legal responsibility ; id.; Bank of U. S. v. Dunn, 6 Pet. (U. S.) 51, 8 L. Ed. 316. The president has no power to sell or surrender securities and receive others of an inferior value; First N. Bk. v. Bennett, 33 Mich. 520. Ordinarily his authority is very limited ; he may bring actions at law and employ coun sel for the purpose of protecting the rights of the bank, but he is not its executive offi cer nor has he charge of its money opera tions. He has no more power a manage ment nor disposal of the property of the cor poration than any other member of the board of directors unless further powers are conferred upon him by the charter of the bank or by the action of the managing board; First N. Bk. v. Lucas, 21 Neb. 280, 31 N. W. 805. He may not make an agreement binding on the bank and embodying a trans action not within the usual course of business of the bank ; First N. Bk. v. Hoch, 89 Pa. 324, 33 Am. Rep. 769 ; but see Burton v. Burley, 13 Fed. 811, 9 Biss. 253. i A bank is liable upon notes, executed by it through its cashier, for loans made by another bank in an amount not so great as to create suspicion, where the actual man agement of the bank was left entirely to such cashier, and the negotiation and all the correspondence were such as might lead the officers of the lending bank to believe that he was acting on authority and in good faith and honest intention, though the mon ey was used by him for his own individual purposes, and the signature of the president was forged ; City N. Bk. v. Bank, 80 Fed. 859, 26 C. C. A. 195 ; but where the affairs of a national bank were managed entirely by the cashier, who was universally be lieved to be honest and capable, but whose dishonesty and reckless management result ed in wrecking the bank, the president and directors, most of whom were farmers know ing little of banking, were not guilty of neg ligence so as to be liable for losses to credi tors because they failed to examine the books, the statements being prepared and furnished them by the cashier, and reporting the bank to be in a prosperous condition, and there being no grounds of suspicion known to them; Warner v. Penoyer, 82 Fed. 181, following Briggs v. Spaulding, 141 U. S. 132, 11 Sup. Ct. 924, 35,L. Ed. 662.
The United States district court has jur isdiction of suits against national banks, brought by the United States or by direction of any officer thereof, and of cases for wind ing up their affairs, and of all suits brought by any bank to enjoin the comptroller, or a receiver acting under his direction. Banks are "declared citizens of the states in which they are located,", for the purposes of all other suits by or against them, real, personal or mixed. Judiciary Act of March 3, 1911.
A national bank may bring suit the circuit court out of its district, against a citizen of the district where the court sits; Manufacturers' N. Bk. v. Baack, 8 Blatchf.
137, Fed. Cas. No. 9,052; Davis v. Cook, 9 Nev. 134; and state courts have jurisdiction of suits brought by national banks ; First N. Bk. v. Hubbard, 49 Vt. 1, 24 Am. Rep. 97; but this must be a state court of its locality ; Bank v. Bank, 14 Wall. (U. S.) 383, 20 L. Ed. 840; Crocker v. Bank, 101 Mass. 240, 3 Am. Rep. 336.
Mortgages held by national banks are not subject to taxation by 'a state; First N. Bk. v. Kreig, 21 Nev. 404, 32 Pac. 641; nor can the stock in a national bank be taxed in any state other than that in which the bank is located; De Bann v. Smith, 55 N. J. L. 110, 25 Atl. 277.
A national bank may go into liquidation and be closed by a vote of the shareholders of two-thirds of its stock ; R. S. § 5220; although it be contrary to the wishes and against the interests of the owners of the minority of the stock ; Watkins v. Bank, 51 Kan. 254, 32 Pac. 914. In case of a failure to pay its circulating notes, the comptroller may appoint a receiver to wind up national banks ; R. S. § 5234.
State banks may be changed into national banks ; the change when made is a transit, and not a creation ; see Coffey v. Bank, 46 Mo. 140, 2 Am. Rep. 488; and does not affect its identity or its right to sue upon obliga tions or liabilities incurred to it by its for mer name; Michigan Ins. Bk. v. Eldred, 143 U. S. 293, 12 Sup. Ct. 450, 36 L. Ed. 162.
Federal Reserve Banks. The act of De cember 23, 1913, is entitled an act "to pro vide for the establishment of federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective super vision of banking in the United States, and for other purposes." Federal Reserve Districts. It provides that the secretary of the treasury, the secre tary of agriculture and the comptroller of the currency, acting as "the reserve bank organization committee," shall designate not less than eight nor more than twelve cities as federal reserve cities, and divide the con tinent of the United States, exclusive of Alaska, into districts, each to contain only one such city. Only the federal reserve board, when organized, shall review their action, and may readjust the districts and create new ones, not exceeding twelve in all.
The committee shall supervise the or ganization in each of the cities of a federal reserve bank, entitled, e. g., "Federal Re serve Bank of Chicago." Every national bank is required, and ev ery eligible bank in the United States and every trust company within the District of Columbia is authorized, to signify in writing within sixty days after the passage of the act its acceptance of its terms.
Every national bank within the district is required within thirty days after notice to subscribe to the stock of such reserve bank in a sum equal to six per cent. of its paid-up capital and surplus. The shareholders of every reserve bank are individually respon sible, but not one for another, for the en gagements of the reserve bank to the ex tent of the amount of their subscriptions at par in addition to the amount subscribed.
Any national bank failing to signify its acceptance of the act within sixty days shall cease to act as a reserve agent, upon thirty days' notice within its discretion from the committee or the reserve board.