less the term "savings bank" is restricted to the old type of savings bank, which shows tendencies toward obsolescence. Regarding banks with reference to their functions, the usual division would be banks of issue, banks of discount, and banks of deposit. Banks of deposit would include savings banks. But this division is not valuable, for the reason that there are no banks purely of issue or purely of discount. The national banks alone are banks of issue, but they are also banks of deposit and discount. State banks of issue no longer exist, but all commercial banks, corporate as well as private, are banks both of deposit and discount. Therefore this division fulfills no useful purpose, but it is advantageous as an aid in defining the meaning of the term "banking powers." Since this latter term is often used in statutes in a general way, it becomes absolutely necessary to define the term "bank,” and thus, as incidental thereto, to define the phrase "banking powers." This definition must be sought for in the decisions. But in law as in every other science, where terms in common use are utilized, the meaning of a word will often vary with reference to the circumstances in which it is used. From one point of view in the law, courts have found it necessary to define the word "bank" in terms which will not be satisfactory from another point of view. It is a truism, frequently disregarded, that the language of a court should never be considered apart from the circumstances of the particular case in regard to which the language is used. Especially is it true that the framers of statutes and constitutions have used legal terms without any accurate judgment of the result. The courts, in consequence, in order to do justice to litigants, have often been compelled to do violence to language. In construing a penal or prohibitory statute, the word "bank" has had in some instances a different meaning from that which it has borne to a court construing a revenue or a license tax law. It will therefore be sought to define the words "bank" and "banker" with reference to the language of decisions, keeping in mind the particular connection in which the language is used. § 2. General definition.-A learned and generally accurate judge,' attempting a general definition, has defined a banker to be "one who keeps a place for the traffic of money; who there receives it from others and keeps it with his own, using the whole fund as his own, or remits it at request to other places; who repays it at the will and call of his customer; who furnishes money to others on the discount of their obligations, or on securities brought by them; and who buys and sells bills of exchange. To these is sometimes added the issuing of his notes to pass as money, when allowed by law to do so." This definition ignores, however, savings banks as that term was originally understood. In a brief of D. B. Ogden, 13 Pet. 530, and in Bank v. Collector, 3 Wall. 495, repeated by the same judge,3 with a historical summary, in Oulton v. Savings Institution, 17 Wall. 118, is the usual definition found in the encyclopedias: "Banks, in the commercial sense, are of three kinds, to wit: 1, of deposit; 2, of discount; 3, of circulation." To this is added by the court the statement: "All or any two of these functions may, and frequently are, exercised by the same association, but there are still banks of deposit without authority to make discounts or issue a circulating medium." The court also states that any one of the three functions makes a bank." But this latter statement is not accurate, because a discounter of notes, who is often called a "note-shaver," is not ordinarily considered a banker, nor is one who loans his 1 Foulger, J. Compare with this definition the language of section 3407, Revised Statutes, and the decision in Richmond v. Blake, 132 U. S. 592. The decisions in Bank v. Collector, 3 Wall. 495, and Oulton v. Savings Institution, 17 Wall. 118, proceed upon the same general theory of defining the term by reference to the business functions which the banker performs. 2 People v. Doty, 80 N. Y. 225, 228. This definition is not expressed in terms so general (but which are fully as accurate) as the phrase of Mr. Horn: A bank is "an office for the circulation of capital in the form either of accumulated labor (money of all kinds), or of labor yet to be done (credit)." 1 Encyc. Pol. Science, 228. 3 Clifford, J. 4 Bank v. Collector, supra. 6 People v. Brewster, 4 Wend. 498. But this case is perhaps to be better considered as a case of statutory construction. See People v. Bar 7 own capital. It has been held that merely receiving deposits was not banking; but another court has said that, where a couple of attorneys own a private bank, which receives deposits, they are to be considered bankers under the terms of a penal statute. § 3. Under revenue laws.- It is apparent that courts, in construing revenue laws, will give terms a wider meaning than when construing a penal statute, or a statutory or constitutional prohibition, when it is sought to bring an individual within the terms of the statute. The business of banking, under the license tax law, consists, among other things, in having a place of business where money is received on deposit and paid out upon checks or loaned upon security. But a so-called loan company which did not receive deposits, but loaned its own capital on realty security, and sold and guaranteed its mortgages, was not a bank under this statute. It seems reasonably certain that a place of business performing either the banking function of deposit or that of issue would be considered a bank. The same cannot safely be said of a business confined wholly to discounting. One court has held that a banker can be compelled to pay a license on the ground that he is a "moneychanger." This last decision is historically correct, because originally the sole business of the medieval prototype of the modern banker was exchanging the different varieties of money. 3 tow, 6 Cow. 290, and Curtis v. Leav- to deal in notes, drafts and bonds, itt, 15 N. Y. 9, 56. and buy and sell bills of exchange, 7 Corwin v. Insurance Co., 14 is not a money broker or exchange dealer under a license statute. State Ohio, 6. 8 Commonwealth v. Sponsler, 16 v. Field, 49 Mo. 270. This decision Pa. Co. Ct. R. 116. 1 Warren v. Shook, 91 U. S. 704. 2 Selden v. Equitable Trust Co., 94 U. S. 419. The statute was 13 Stat. at Large, 252, carried into sec. 3407, Rev. Stat. U. S. 3 Hinckley v. Belleville, 43 Ill. 183. But a savings bank authorized seems to be based upon the idea that it would be impossible to imprison the corporation. 41 Encyc. Pol. Science, 232. The historical excursus in Oulton v. Sav. Inst., 17 Wall. 118, is hardly accurate. § 4. Under constitutional and statutory restrictions.The general restrictions against banking in constitutions have been without exception held to apply only to banks of issue. Courts have been compelled to apply harsh measures to constitutional absurdities. Thus in California the constitution (art. 4, sec. 4) prohibited the grant of a charter for banking purposes. A later section (35) of the same article stated emphatically that the legislature should prohibit any person, association or corporation from exercising the privilege of banking or creating paper to circulate as money; yet these provisions were held to mean banks of issue, not banks of deposit or discount. Similar holdings have been made in other states, where bank charters were prohibited or banking laws were required to be submitted to popular vote. The state of Illinois in its last constitution has insisted upon this species of referendum as to any law authorizing banking corporations, whether of deposit or discount or issue, or amendments thereto. A prohibitory statute led to a very extraordinary ruling. A statute forbade the establishment in the Territory of Washington of any branch or agency of a corporation whose charter granted it banking privileges. It was seemingly held that a corporation whose charter gave it the power to "draw, accept, indorse, guaranty [sic], buy, sell and negotiate drafts and bills of exchange, inland and foreign; to receive coin, money, silver and gold in any form or other [sic], and any kind of valuables on deposit at its offices, and make orders for the payment and delivery of the same or an equivalent at any place whatsoever; to buy, sell and dispose of gold and silver, coin and bullion, gold dust, money and securities for money, and to do a general exchange and collection business, and 1 Martinez v. Hemme Co., 105 Cal. 440; People v. Lowenthal, 93 Ill. 376; Bank v. Fairbanks, 52 Cal. 196. 191; Dearborn v. Bank, 42 Ohio St. In the latter case the corporation 617. was organized for banking business, so far as under the laws of California it could legally exist. 2 Pape v. Capital Bank, 20 Kan. 3 Art. 11, sec. 5. Const. of 1870. See also Reed v. People, 125 Ill. 592; Dupee v. Swigert, 127 Ill. 494. to invest its surplus or unemployed funds," etc., was not a corporation with banking privileges. This was decided in spite of the fact that the corporation was carrying on a very large banking business in various places. It shows how far the courts will go in trying to avoid a seeming injustice. § 5. Construction of charters.- The court, in the case just cited, intimates that under such a charter the association might be exceeding its powers in doing a general banking business. Courts, generally, in construing charters, construe them strictly as against the state, and more liberally where the objection comes in a collateral way. A corporation engaged in loaning its own money upon notes and mortgage security was held not to be a banking corporation.' A company investing its profits in loans secured by mortgages would not be engaging in the banking business.2 In another case the president of a trust company was being prosecuted as the officer of a bank receiving a deposit knowing his bank to be insolvent. The trust company had been in the habit of receiving deposits of money subject to check. Its charter gave it the power of receiving money in trust and of accumulating the same, and to loan money on real estate and collateral, and to execute and issue notes and debentures, and to buy and sell all kinds of negotiable and 'Wells, Fargo & Co. v. Nor. Pac. Ry. Co., 23 Fed. R. 469, per Deady, Dist. Judge. The case was mandamus to compel the defendant railroad to furnish express facilities. The court apparently lost sight of the statute altogether and held that it made no difference that Wells, Fargo & Co. were doing a banking business elsewhere; the test would be whether they were doing such a business in Washington. The statute, however, made the test to consist of the powers granted to the corporation by its charter, not what business it was actually doing. The case refers to an earlier unreported case of the territorial court. 1 Oregon, etc. Investment Co. v. Rathburn, 5 Sawy. 32. The court went so far as to assume that the corporation was loaning its own capital. But there was no proof whatever to show that fact. The question arose collaterally. 2 Life Ass'n v. Levy, 33 La. Ann. 1203. This case is apparently one of construction of a charter. |