First National Bank in Plant City v. Dickinson

PETITIONER:First National Bank in Plant City
RESPONDENT:Dickinson
LOCATION:Dodge County Juvenile Court

DOCKET NO.: 19
DECIDED BY: Burger Court (1969-1970)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 396 US 122 (1969)
ARGUED: Oct 16, 1969
DECIDED: Dec 09, 1969

Facts of the case

Question

Audio Transcription for Oral Argument – October 16, 1969 in First National Bank in Plant City v. Dickinson

Warren E. Burger:

First National Bank versus Dickinson and the Camp versus Dickinson.

Mr. Springer, you may proceed whenever you’re ready.

James Van R. Springer:

Mr. Chief Justice, may it please the Court.

These are two consolidated cases reviewing the same decision by the Court of Appeals for the Fifth Circuit.

The ultimate question presented is whether state banking authorities can prevent a National Bank from providing its customers with an armored car messenger service to and from the bank, if they can do so on the theory that such a service amounts to the operation of a branch governed by a state law under the National Bank Act.

Section 36 (c) of that Act provides in general term that a National Bank may establish and operate a branch if a state bank similarly situated would be authorized under state law to do so.

Florida, where this case arises is a state that does not permit branch banking at all and it is further established for present purposes at least that a Florida State Bank would not be permitted by the state authorities to operate the messenger service here in question.

I might say parenthetically the reason it’s established for present purposes only is that the Court of Appeals noted in its opinion that there is litigation pending in a Florida State Court where this issue had been raised for the first time that will resolve presumably as a matter of state interpretation whether or not this kind of service is in fact prohibited by the Florida statute.

However, subject to the outcome of that litigation which the Florida Court has stayed until this Court decides this case, the Court of Appeals accepted the interpretation of the Florida State Banking Commissioner who was one of the respondents here that the Florida Statute would prohibit this kind of service subject only to a retention of jurisdiction by the District Court to change its order.

William J. Brennan, Jr.:

Let’s see Mr. Springer, the Florida Court would say that this is not prohibited by a part of a statute then the issue we have here wouldn’t be here?

James Van R. Springer:

Yes, yes, that is correct Mr. Justice Brennan.

William J. Brennan, Jr.:

Instead of putting the cart before the horse, is it?

James Van R. Springer:

In fact, it seemed a little strange to me that the Florida Court would stay itself pending determination of this case, but it in fact until is done so.

In any event, nobody knows what will happen to that litigation and unless something does happen, the Court of Appeals has in effect decided that this service cannot proceed.

The issue therefore in this case is whether the kind of messenger service involved here is a branch, being of course the term of order of the National Bank Act.

If it’s a branch then 36 (c) of the National Bank Act makes its legality depend upon state law and as I have said, state law for present purposes forbids it.

If it is not a branch then its legality depends only upon the provisions of the National Bank Act relating to the powers of National Banks which do not refer to state law and are not in issue in this case.

As we see it, the definitional problem that this case presents breaks down really into two questions.

The first question is the threshold question of where we look for the criteria to determine, “What is a branch?”

We say that naturally enough one would look to subsection (f) of the branching section of the National Bank Act Section 36, which says that the term “branch” is used in this Section shall be held to include any branch bank, branch office, branch agency, additional office or any branch place of business at which deposits are received or checks paid or money lent.

The Court of Appeals said however, that 30 — Section 36 (f) is hardly adequate as a definition, those are the words that it used, and therefore that the law of Florida should determine what is a branch for purposes of this incorporation of state law that’s provided for in Section 36 (c).

As I’ve indicated if the Court of Appeals was right that in the case here, if we’re right there remains a further question whether the District Court properly held that the armored car messenger service in question here was not branch banking as a matter of purely federal law under the Section 36 definition which the District Court treated as the exclusive definition and of course if the District Court was right, then Florida law has nothing to do with the case.

There are — these main two cases, there are two petitioners here, Comptroller of the Currency who has authorized the service in question and the First National Bank in Plant City, Florida, which is the bank that’s conducting the service.

There will be argument on behalf of each petitioner.

In my argument I plan to cover the first of the questions that I’ve mentioned, the choice of law question, which has importance not only for this particular kind of service but for a variety of other services that National Banks offer or may wish to offer.

Mr. Edwards who will be arguing on behalf of the bank will deal primarily with the second question which assumes that of course that if we prevail on the first question, the question as to how the facts of this particular service relate to the federal definition in Section 36 (f) if that is in fact the governing definition.

That question of course also has great importance because there are a great variety or a great number of National Banks throughout the country that provides services or interested in providing services of the general nature of the services that are involved in Plant City.

Because of this division, I would hope to limit my statement of the case to a very brief statement of how the case arouse and the fundamental facts, leaving for Mr. Edwards a more detailed description of the messenger service that’s involved in the case.

Could you raise your voice a little, Mr. Springer?

James Van R. Springer:

I’m sorry.

Hard feelings?

James Van R. Springer:

In October 1966, after consultation with the Comptroller of the Currency’s office, the Plant City National Bank began to operate its messenger service.

It was designed for the benefit of customers primarily stores in the outlying areas of Plant City, Florida which is a city of about 18,000 people some 20 miles inland from Tampa.

The messenger service has two elements.

First, an armored car, which pursues a daily route between the bank’s office and the costumers’ places of business.

A messenger arrives on that truck and he receives from the customer’s sealed bags containing funds for deposit in the bank which he then delivers to a teller at the bank’s office who opens the bags and then treats the contents as deposits when they are received at the bank.

The messenger also delivers to the customers upon prior order by the customers sealed bags that contains change or funds for use in their businesses which have been withdrawn from the customers accounts before the truck leaves the bank.

The second element of the messenger service is a secured receptacle, which is literally a hole in the wall and at shopping center with the drop slot where sealed bags or envelops containing funds for deposit in the bank can be left for pickup by the messenger service during the course its daily rounds.

The armored car operation was designed to comply specifically with paragraph 7490 of the Comptroller’s Manual for National Banks, which is a compilation of pertinent regulations among other things.

That paragraph authorizes such an operation subject to the condition that the customer understands the messenger as his agent and not the bank’s and that any funds received are not actually deposits until the teller at the bank accepts them.

The bank also obtained with respect to the shopping center pickup point a specific ruling from the Comptroller’s office that that was permissible subject generally to the same conditions that I mentioned.

Underlying both rulings of course was a determination by the Comptroller’s office that such operations subject to these conditions were sound and safe services authorized by the National Bank as incidence to the conduct of a banking business and that they did not operate to the — amount to the operation of a branch as to which of course state law would be pertinent.

Just as the messenger service was about to begin its operations, the respondent Dickinson, who was the Florida State Banking Commissioner sent a letter to the president of the bank and expressing the view that the services would violate Florida law and threatening suit if the bank did not cease and desist.

The bank promptly began this suit in the District Court seeking declaratory judgment and an injunction to prevent such state interference with the operation.

The Comptroller of the Currency subsequently intervened as a plaintiff and the respondent, state bank here also intervened as defendants on the side of the state commissioner.

At the outset of litigation, the District Court entered a preliminary injunction allowing messenger service to continue and in fact that preliminary injunction has continued in effect until now so the service has been proceeding.

Then after exploration of the facts and affidavits and upon reading in depth voluminous depositions that were taken in the case, the District Court entered summary judgment in behalf of the National Bank and the Comptroller.

Hugo L. Black:

Would you mind stating precisely the nature of business of the alleged so-call branch bank, the messenger bank?

James Van R. Springer:

As I indicated Mr. Justice Black, I had hoped perhaps that Mr. Edwards in his portion of the argument could describe that more fully.

Hugo L. Black:

I would like —

James Van R. Springer:

I will —

Hugo L. Black:

I know more about the case if you would do that.

James Van R. Springer:

Well, as I indicate —

Hugo L. Black:

That — if it bothers you, you waive it.

James Van R. Springer:

It does not bother me Mr. Justice Black.

I did try to outline the general language it operates.

Hugo L. Black:

I didn’t (Voice Overlap) —

James Van R. Springer:

It involves an armored car which picks up from customers, generally business enterprises in the outlying areas of Plant City, sealed canvass bags containing funds which they wish to deposit at the main office of the bank in downtown Plant City.

It receives those, turns them over to a teller, actually two officials of the bank at the office who then open the bags, count the money, treat the money as if it were then deposited at the point when it reaches the bank.

Hugo L. Black:

You go and pick it — do they go and pick it up at the individual stores in the outlying (Voice Overlap) —

James Van R. Springer:

The messenger on the armored car does do that, yes, Mr. Justice.

Hugo L. Black:

How far does he go?

James Van R. Springer:

I —

Hugo L. Black:

Does he go to any other villages or town?

James Van R. Springer:

I — and Mr. Edwards may correct me and I believe not.

I believe it’s only incorporated more or less rural areas surrounding this shopping center.

Warren E. Burger:

But these are employees of the bank, are they not?

James Van R. Springer:

Yes, they are.

Warren E. Burger:

And the truck is owned by the bank?

James Van R. Springer:

Yes, it is.

Warren E. Burger:

And they’re controlled by the bank?

James Van R. Springer:

Yes, in the sense that any employee would be.

Warren E. Burger:

There are routes — their daily activities are directed by the bank as principle as the employer?

James Van R. Springer:

Yes, Mr. Chief Justice though of course the con — there are contractual relationships.

There’s a specific contract with each customer upon whom the truck calls.

There’s a contract in which the customer states that he understands it that in fact the messenger is his agent not the banks and that money is not treated as a deposit until it is actually received at the bank which of course has substantial practical significance.

If the truck were robbed, the money would still be the customer’s money and not the bank’s money.

Warren E. Burger:

But it’s not sure (Voice Overlap) —

James Van R. Springer:

It’s true that there is insurance but it would not be a deposit until the customer for example, in a case of a robbery, obtained recovery from the insurance company and then gave that money to the bank.

Warren E. Burger:

And who provides the insurance?

James Van R. Springer:

The bank pays for the insurance.

Thurgood Marshall:

Does the depositor pay anything for this service?

James Van R. Springer:

No, he does not Mr. Justice Marshall.

I understand that though it’s — I suppose not strictly part of the record though it has been contemplated that when the service shakes down, and I don’t know exactly when that would be and some allocation of costs could be made then perhaps insurance would be paid by the customers, but it is true that there is now no charge to the customers.

As I indicated, the District Court agreed with what this — in substance our position here that the determination whether or not this service amounts to a branch is one of purely federal law in the application of the definition that’s set forth in the National Bank Act.

He further determined that this service did not amount to a branch that the Comptroller had properly so determined and accordingly the service was allowed.

The Fifth Circuit reversed, taking the approach that the question whether or not this was a branch and therefore whether Florida law would be incorporated and therefore whether Florida law would be allowed to prohibit this service was a question of state law and that since Florida law as the Court understood it regarded this activity as a branch therefore, Section 36 —

William J. Brennan, Jr.:

Now wait, what was the source of that Florida law?

James Van R. Springer:

The source of that Florida law as to what was a branch, was ultimately the Court of Appeals’ notion of the meaning of a Florida statute, which in fact says nothing about branching or about branches in terms.

It simply says any bank or trust company shall have only one place of doing business and skipping a bit and the business of the bank or trust company shall be transacted at its banking house and not elsewhere.

William J. Brennan, Jr.:

That there are no Florida decisions would support the Court of Appeals’ interpretation you say?

James Van R. Springer:

That is true Mr. Justice Brennan.

There is a fact —

William J. Brennan, Jr.:

That what — is that issue now before the Florida (Voice Overlap) —

James Van R. Springer:

As I say is that the issue in a court and a case which is now on a — at a lower court in Florida which of course may work its way up through the system.

The Court of Appeals did as I indicated note review of the Florida banking commissioner and did to be frank indicate that it thought that was a reasonable position, so it was not and an out reliance simply upon the ruling of a Florida official.

The Fifth Circuit’s decision leaves us what seems to us an anomalous principle one which is apparently repudiated in this Court by the respondents, but which is enthusiastically supported by the amicus brief that’s been filed on behalf of the National Association of State Bank Supervisors who I understand will be presenting oral argument and who represent all 50 of the state banking commissioners, including the one who is a respondent here.

We believe that the principle followed by the Court of Appeals is erroneous and that it is one that would be highly damaging to the proper regulation of the National Bank system.

We think that a straight forward reading to begin with of Section 36 of the National Bank Act makes it quite clear that Section 36 is designed to establish a uniform and exclusive definition of what is a National Bank branch.

The structure of Section 36 remains now very much as it was when it was first enacted in 1927 as Section 7 of the McFadden Act which for the first time allowed National Banks to engage in branch banking, generally speaking on the same terms as state banks.

The introductory paragraph of Section 36 provides that the conditions upon which a National Bank — Banking Association may retain or establish and operate a branch or branches are the following and the word “branch” appears throughout the Section notably in subsection (c) to which I have referred, which says that “a National Banking Association may with the approval of the Comptroller of the Currency establish and operate new branches if such establishment and operation are at the time expressly authorized to state banks by the law of the state in question.”

Now, there are further refinements there which I won’t —

William J. Brennan, Jr.:

Mr. Springer, do you read the Court of Appeals’ opinion and citing that the — whether this is a branch under federal law and wholly irrelevant to consideration?

James Van R. Springer:

I acknowledge that there is a certain amount of not entirely clear language in the opinion.

I think that the ultimate — the court’s statement of what it was holding and it’s holding in fact can only be read as a holding that if state law regards it’s as a branch, it is therefore a branch for purposes of federal law and therefore state substantive law of branching is incorporated by Section 36 (c).

William J. Brennan, Jr.:

With respect to whether looking at it simply because the court findings of the federal law, it’s a branch or not?

James Van R. Springer:

Yes, in fact the Court of Appeals said that the federal law is hardly adequate as a definition and as we read it, I have seen — as the state bank supervisors read it, I believe that in substance it does amount to saying that if state law calls it a branch, you don’t have to look at the federal law.

That seems to us a highly anomalous reading of a subsection of a federal statute which says that the term “branch” is used in this Section shall be held to include any branch bank office, agency, additional office at which deposits or receive checks paid or loans or money lent.

Congressman McFadden who is of course the sponsor of the Act said at his own analysis of the act upon its passage that subsection (f) and now I’m quoting from his language defines the term “branch” and he plays outside of the way — or away from the main office where the bank carries on its business or receiving deposits, paying checks, lending money or transacting business at the main office is a branch.

And of course this question of “What is a branch?”

is relevant for a variety of purposes other than subsection (c) to which who we refer in our brief, including sections where there is no semblance of any incorporation of state law.

It seems unusual that Congress would expect that these — that the definition of branch for these purposes would vary according to the state where the particular National Bank in question is located and it seems even more anomalous to treat the word “branch” as having different meanings in different subsections of the same section enacted at the same time.

As we further detail in our brief, the Comptroller, the Attorney General and until this case, the Federal Courts have all treated the question of whether or not a particular enterprise is a branch as a question of federal law unaffected by local law0 and of course this is consistent with the general principle that when Congress uses a word unless there’s some reason to believe, otherwise, Congress intended that that word should be defined and interpreted as a matter of federal law.

Thurgood Marshall:

Mr. Springer, is it true in the Plant City, a state bank could not operate this service?

James Van R. Springer:

It — as I — subject to what I said before that that is true, subject to a possible decision of the contrary by the Florida Courts where the question as — but for present purposes, that is true.

Thurgood Marshall:

But as (Voice Overlap) and now as the way the law it now stands in Florida, a state bank could not give its depositors this additional free service?

James Van R. Springer:

Yes Mr. Justice, that is correct.

Thurgood Marshall:

But a National Bank can?

James Van R. Springer:

Yes.

We say that —

Thurgood Marshall:

Isn’t that contrary to the Act itself, the purpose of the Act?

James Van R. Springer:

It’s argued of course that that is contrary to a supposed principle of competitive equality and of course that principle was articulated and followed by this Court in the Walker Bank case.

As to that, of course the Walker Bank case involved the situation where nobody questioned that what was involved was a branch and that there was an incorporation of state law.

The question there was, “Is all of the state law incorporated or as the Court put it, only some of it?”

The Comptroller made a valiant uphill argument that it was only the law relating to location that was incorporated and not the law relating to the manner in which a branch can be establish.

This case on the other hand, raises the question whether there is any incorporation of state law at all.

There is such an incorporation only if there is a branch.

We would submit that the policy of “competitive equality” which is a genuine policy comes into play only to the extent that there is in the Act an incorporation of state law.

It is not an all pervading absolute policy that runs throughout every provision of the National Bank Act and of course there are great many things that National Banks can do that states banks cannot do and there are a great many things that state banks cannot do that National Banks can — state banks can do that National Banks cannot do.

So, that we say that while “competitive equality” is a very genuine principle, it is a principle that applies only in the instances where Congress has specifically provided for a reference to state law.

Byron R. White:

— that where amongst the questions of government law lose that part of this [Inaudible]

James Van R. Springer:

Yes, that is certain true Mr. Justice White and I’m relying on my colleague primarily to convince you that that as a matter of the federal definition this act, this pickup and delivery service does not amount to the conduct of a branch and more particularly in the words of the statute does not amount to the receipt of deposits or the payment of checks.

The effect of the Court of Appeals’ notion of the all pervading applicability of a principle of competitive equality is delegate to the states a broad control over perhaps any off-premise activity by a National Bank.

All the state has to do is call it a branch and then like calling it a branch, the state can succeed in having its own substantive law which may permit it or may prohibit it, incorporate it, purportedly through subsection (c) of Section 36.

Warren E. Burger:

Well, if a state did that, I suppose the Court might be interested in whether the state was doing something of the same general character and not calling it a branch, wouldn’t they?

James Van R. Springer:

Oh!

It would certainly be turned.

Of course the state Comptrollers say that, “Why should anybody be worried?”

The state Comptrollers can prohibit an act by a National Bank only if they are also willing to prohibit it by a state bank.

Warren E. Burger:

And you indicated I think earlier that the state does not permit this activity for a state bank.

James Van R. Springer:

Yes.

Of course the effect of this is — first, to move from the federal Comptroller to the state officials or at least to the state legislature, a broad range of control over the incidental services that a National Bank can perform off its premises.

This involves not only armored car service of this type but involves a broad range of activities related to the lending of money which is another issue of some kind of importance in the area.

Potentially, it could involve things like a bank credit card for example, which I suppose a state Comptroller could regard as a banking activity being carried on off the banks premises.

And if the state Comptroller chose to prohibit it, he could prohibit it and under the Fifth Circuit’s theory, it appears that that would mean that in that particular state a National Bank cannot carry on that kind of activity.

Hugo L. Black:

Does a messenger a lien man?

James Van R. Springer:

No, there is no, I believe there’s no issue whatever in this case Mr. Justice Black of lending.

I am just saying that —

Hugo L. Black:

(Voice Overlap) —

James Van R. Springer:

— of course the principle of a aligning the states in to this extent would permit them to govern when to —

Hugo L. Black:

(Voice Overlap) lending activities, the reason I asked the question?

James Van R. Springer:

No, certainly on the facts of this case, there is no question of lending.

Hugo L. Black:

It’s all they do to accept deposit?

James Van R. Springer:

Well, in a technical sense at least they do not accept deposits.

They accept money for deposit.

Hugo L. Black:

Well —

James Van R. Springer:

The deposit taking place when the teller —

Hugo L. Black:

Is that all they do?

James Van R. Springer:

And they also deliver funds withdrawn from a customer’s account to the customer’s store.

He can call in and say, “Would you please take (Voice Overlap) —

Hugo L. Black:

Do they cash check?

James Van R. Springer:

No, they do not.

With no charge, no extra charge?

James Van R. Springer:

No, it’s true there is no — there is at present no charge to the customer other than the charges of having the account at the bank and of course there’s the factor that generally the people who use this are relatively large customers from whom of bank presumably receives relatively large service charges.

However, this is based with the case that colleague [Inaudible] of argument?

James Van R. Springer:

Yes, so of course I’m happy to answer.

So, as I have indicated we think that does have broad significance, some of which has been indicated in some detail by the brief filed by the Bank of Cornelia and a group of other national banks throughout the country as amicus curiae in this case.

In sum, we think on this choice of law issue that the District Court gave Section 36, a simple straight forward and sensible reading.

The act provides according to that reading which seems not only sensible, but the least complicated approach which has some virtue that National Banks can have branches where state banks can have branches, but as befits a comprehensive scheme of federal regulation, the act specifies that uniformed nationwide set of criteria for determining what is a branch and therefore when we look to state law.

I might just say a word by way of introduction to Mr. Edwards’ point that of course the Comptroller in promulgating the rulings pursuant to which these activities are being carried on made a determination that this pickup and delivery services do not amount to branch banking.

The Federal Reserve Board for its own purposes which involve its regulation of state banks that are members of the Federal Reserve System which are governed by the same law, the same federal law with respect to branching has made exactly the same determination.

We believe that those interpretations are first the only reasonable ones that can be given of the federal statute assuming we are treating the question as a matter of federal law.

In any event, we believe that the expert interpretations of the law that they are directed to administer by these two federal agencies is entitled to a certain amount of deference.

If there’s an area of reasonableness that determination should be set aside only if it is found to be unreasonable.

Therefore, we believe first that the question is before this Court is one of federal law and that the federal law was properly interpreted with respect to this kind of situation.

What’s the language that you’re relying on, the Court of Appeals’ opinion which excludes any necessity for examining the — arraignment here, in terms of federal law?

James Van R. Springer:

We have set forth some of that on our reply brief at page three.

First of all, the Court starts of early in its opinion by saying that the controlling issue of law in this appeal concerns the District Court’s choice of law.

That is that court’s failure to consult state law in determining whether First National’s activities constitute branch banking.

Then it goes on to say First National attempts us to convince — attempts to convince us that Section 36 (f) is the sole and monolithic definer of branch then by taking us through some level [Inaudible] and meandering past of the laws of agency in contract.

James Van R. Springer:

First National seeks to demonstrate that it is not a established offices or agencies whereas specified in Section 36 (f), deposits are received or checks paid or money lent.

Such a line of argument is the Court of Appeals said in the principle and finally, it’s said towards the end of its opinion we therefore refuse to pass the twisting pass of agency in contracts urged upon us in this case and look instead to the laws of Florida.

I think as I have said that considering that language plus the result, we have to say that in effect the Court of Appeals have said that the language of 36 (f) is superfluous.

It’s there, but it really doesn’t have any meaning because if the state calls it a branch, then it is a branch.

Warren E. Burger:

Thank you Mr. Springer.

Mr. Edwards.

Robert S. Edwards:

Mr. Chief Justice and may it please the Court.

I’d like to begin if I might by addressing myself just generally to how we got in to this situation.

I represent the First National Bank in Plant City who filed the suit for declaratory relief in the Federal District Court, in the Northern District of Florida where Mr. Dickinson resides in Tallahassee.

We were faced with the situation of where we had gone to this Comptroller of the Currency who is our supervisor and our boss as it were and had cleared with him and had — having analyzed his regulations and rulings that we could carry on this transaction that we do now carry on.

We had prepared and began to render this service when we received a letter directed to us by the Assistant Deputy Banking — the Deputy Banking Commissioner of the State of Florida simply telling us to cease and desist that their activities constituted branch banking under Section 659.06 of the Florida law and indicated that if we did not elect to cease and desist that they would take action as they had just recently filed against a bank in Panama City to require us to terminate this type of service that we were rendering.

It was much later in — as a matter of fact after a favorable decision by the Federal District Court and the appeal was well on to the Circuit Court of Appeals whenever the state court was first involved in this litigation by a service that was began by a bank in Tallahassee.

So, that the state litigation arose much later in the course of time and there was no state litigation available or state decisions available that would guide anybody at the time that the District Court made its decision in this matter.

I might as a matter of passing point out to you that much later even after the Circuit Court of Appeals had entered its decision, there was a case in — the Greater Mine and Financial Corporation against Dickinson decided by the Supreme Court of Florida wherein the Supreme Court Florida declined to determine that Section — that Chapter 659 made the activities of a broker who was soliciting and accepting deposits for transmittal to a savings and a loan association in the state of California as a banking activity.

The Supreme Court at that instance said that the receipt of these moneys by this broker to transmit to Tal — California did not constitute the acceptance of a deposit which would violate Chapter 659 of the banking law and in essence make that broker a banker.

So, that that decision by the Supreme Court is available to us from the state of Florida.

There were no other decisions.

There are no other decisions.

The Circuit Court which is the court of original jurisdiction in Florida elected to simply wait the outcome of this case since the activities had been began on the base — based on the District Court’s opinion or decision that it was lawful.

I need to speak to also to the fact that we have been characterized as carrying on a subterfuge in our activities in Plant City.

And I need to say to you that Plant City is a small community located 20 miles from Tampa, 11 miles from Lakeland.

We are a very small community between two larger communities and we are a large developing area.

We serve a much larger community than 18,000 people.

We had a real need shown to us by several of our customers.

Hugo L. Black:

What is the population of Plant City?

Robert S. Edwards:

I beg your pardon sir.

Hugo L. Black:

What is the population of Plant City?

Robert S. Edwards:

Within the incorporated limits, our Chamber of Commerce claims 18,000 people.

We hasten it always —

Hugo L. Black:

Are there any other banks there?

Robert S. Edwards:

There are — there’s one other bank, a state chartered bank that’s been existing since 1905.

It is the Hillsborough Bank and one of the interveners here.

We also have two other interveners which is the People’s Bank of Lakeland which is 11 miles away in the city of Lakeland and the First State Bank of Ruskin which is approximately 25 miles south of us.

These three banks or three state banks are interveners in this cause.

Hugo L. Black:

Interveners and what’s their position?

Robert S. Edwards:

They are on the side of the state banking commissioner.

They have actively carried on the litigation on behalf of the banking commissioner of Florida, resisting the decision of the Federal District Court and sustaining or promoting the decision of the Circuit Court of Appeals.

The Hillsborough Bank has long been in existence, the state banking in the city of Plant City.

We were — became a charter bank in 1957 and as such was the baby bank, the one that needed to get out and to do things in order to get deposits and in order to be able to render a service to the community and thereby grow.

We are the smaller bank of the two banks in the community.

We found ourselves in 1966 and 19 — actually in 1965 with the situation where our city which had been long a very small city was beginning to develop and the first shopping center was coming in.

It was located approximately a mile from town.

We elected or we researched under the federal ruling that was available to us, this idea of how we could render a service to this shopping center approximately a mile from town.

We determined that the locating of a drop, some — very similar, a matter of fact identical to the night depository which we had at the bank.

In that shopping center, would render a very great service to this area because we have all these mini-stores that were confronted with the problem of getting after closing hours, getting from that place to our banking premises hopefully and possibly to the other banking premise to deposit the collections of the day carrying with them all of the attended problems that goes with transporting money after dark and so forth.

When we were able to determine that the Comptroller of the Currency felt that if we complied with these rulings that this drop would not go to and become within the ambit of the definition of a branch bank.

We begin this service and incidentally this service is now being rendered by several other banks within the State of Florida.

This service is simply a place for people to bring their night bags and drop then into the night depository.

So that they will be picked up by our armored car messenger service and transmit it to the bank either that evening or the next morning thereby eliminating the problem that is very difficult for them.

Now, we also elected at the same time because the definite — or because there were — our comptroller’s regulations indicated that it could be done to assign contracts with various other business people in the area which said that we would agree to transmit their funds to the bank for deposit.

As agent with the clear understanding on the basis of the contract that was signed that their deposits would become deposits when they reached the bank, the bank’s teller and thereby we felt that we had adequately met the test that the federal definitions set up.

When we examined Section 36 (f), it was very clear to say that branch banking would be considered and we would become under the Florida regulations when we established a branch place of business or another business office at which we elected to accept deposits or pay checks or lend money.

And we were very careful not because of any subterfuge, but simply because we wanted to stay within the rules and render the service that was needed to have an understanding with our people that this is what we are doing.

And I would submit to you that on the basis of that, we have a clear understanding with these people and that we cannot go beyond that and that we will not go beyond that and that this is a very definite and clear place where you can draw the line.

And that this is what Congress we believe intended to do.

That we —

Warren E. Burger:

I’d like to ask you a little more about the factual setting —

Robert S. Edwards:

Please do.

Warren E. Burger:

— that I think Mr. Justice Black was addressing himself to a while ago.

They carry money both ways, do they?

Robert S. Edwards:

Yes we do.

Warren E. Burger:

Suppose a customer who is a contractor calls the bank and said that he wanted $10,000.00 in small bills delivered in a certain way and delivered to the job site where the contractor was performing work in order to pay off his employees, would the bank — would the First National carry out that instruction?

Robert S. Edwards:

If he has own deposit in the First National Bank $10,000.00 and has previously signed this contractual arrangement with us whereby we have agreed to charge his account.

Then, we will charge his account, place this money in a sealed container outlining the moneys that is in there carry it to the person who has requested it, obtain a receipt from him where he by he acknowledges that we have charged his account at the bank and deliver those moneys to him, yes.

Warren E. Burger:

Would they put it in envelopes with names on it specifying amounts for each person so that these envelopes could be handed out to the employees on the job site?

Robert S. Edwards:

We do that quite frequently for people in our — to come to our drive-in window — if they asked for a pay — that a payroll will be made up, yes we do that and place it within the bag and it can be picked up in our drive-in window at the bank.

Now, I say that because I don’t believe that we’ve been asked to do that in our service.

We have not been called on, but the answer is that is probably we would Mr. Chief Justice.

Warren E. Burger:

How far?

What would be the range of the territory that you would make that delivery to the job site of the contractor?

Robert S. Edwards:

Well, there is no rule on it.

The practical economics of the situation would govern.

We — our truck does go out as far as 20 miles in one or two instances and some other instances are in all honesty the trucks range much further than that.

It — there is no rule within the federal system that says that we can go only so far.

Warren E. Burger:

But a state bank could not or could it afford that service?

Robert S. Edwards:

Under the present circumstances in Florida, it could not because it has been held by Comptroller Dickinson to be a matter of branch banking and they would not allow that.

I think that would bring us well to this idea of the competitive equality which has been the overriding problem in the situation all along.

And I would like to call to this Court’s attention —

Hugo L. Black:

Do you go to villages outside of Plant City?

Robert S. Edwards:

Yes we do, some very small villages are —

Hugo L. Black:

What size?

Robert S. Edwards:

Of one store or two stores, fill-in stations and a store combined to something in its stature.

Hugo L. Black:

Do you have any bank in any of those other places?

Robert S. Edwards:

No sir, there is not.

However, I would want to say to the Court that we have not set our rules that would prohibit us to go into another bank’s community.

We simply feel that we could legitimately do that as that bank, for instance the People’s Bank in Lakeland comes in to our community constantly in advertising and lending money and so forth so that we are constantly competitive with those other banks in the other communities.

Hugo L. Black:

Did you say you had a night depository at some of these places?

Robert S. Edwards:

We have a night depository or we have a drop at the shopping center that is the same thing as a night depository.

It is at a shopping center approximately a mile from our main banking office.

Hugo L. Black:

Is that the only one you have there?

Robert S. Edwards:

It’s the only one that we have, yes sir.

Hugo L. Black:

In other places, you just simply move in there and carry their money —

Robert S. Edwards:

Our truck drives to their door and our messenger carries it to the business house which is previously contracted with us for this service.

Hugo L. Black:

And you get deposits from them, money which is to be deposited then?

Robert S. Edwards:

We — that is correct sir.

We pick up sealed bags upon which there is listed on the outside on a transmittal slip the moneys that is contained therein.

This transmittal slip also has printed on the back side the contract under which we operate specifying that its being transmitted as their agent and that it will become a deposit when it has reached the bank then received by a teller and the deposit slip completed, main deposit slip completed.

Thurgood Marshall:

Suppose the night depository out there is broken into, who is responsible?

Robert S. Edwards:

Under the contract, the funds have not become deposit funds in the First National Bank.

However, we obtained from the insurance company which writes our bond and our insurance a special writer whereby they agreed that they were insuring those funds for the benefit of those persons who have placed the funds in that night depository.

Thurgood Marshall:

Well, then what outside of the technicality is the difference between deposit and out then deposited in your night depository, your night depository in them?

What is the difference?

Robert S. Edwards:

There is no difference in that — in deposit to get out there and the night depository which is located adjacent to our bank, but we would —

Thurgood Marshall:

And your night depository is admittedly a part of the banking business?

Robert S. Edwards:

It is a part of the banking —

Thurgood Marshall:

And why — isn’t that the one out at the shopping center “a part of the banking business?”

Robert S. Edwards:

It is a part of the banking business as it were for terms of the — of a bank’s activities and perhaps comes within the ambit of the Florida statute, I say perhaps.

However, if we go back to the proposition that we must look first to Section 36 (f) of the Federal Statute to determine what is branch banking and therefore what is controlled by the federal law, the deposit contract becomes a very key situation.

In other words, it is the place where we draw the line.

It is the place where we mark the outer limit as this Court said in the Agricultural Bank concerning the right to tax.

It’s the line of demarcation which we believe is a very clear mind — line.

Thurgood Marshall:

Well, why do you — well, why do you insure it if it’s not your money?

Robert S. Edwards:

We insure it because it is a service to our customer and we feel that the customers would be at lost without it.

However, we are very careful to help the customer understand and the insurer to understand that there is a contract protecting them.

And for that reason therefore —

Thurgood Marshall:

There are two contracts taken there, one is the contract and the other is an insurance policy.

Robert S. Edwards:

The contract that they have with us is a definitive contract as the type of service that we’re rendering them.

The contract protecting them is the insurance contract which is a separate contract, yes sir.

Byron R. White:

Well, you have your own liability for the money after all you have custody of it, don’t you?

Robert S. Edwards:

Well, we have a possible liability except for the fact that we have a clear contractual understanding that the money is there.

Byron R. White:

So, one way of satisfying that contingent liability to insure your customer.

Robert S. Edwards:

That’s correct sir and that’s what we’ve elected to do.

Warren E. Burger:

If there was a holdup on the way in of this truck, they would not be robbing the National Bank, would they?

Robert S. Edwards:

No sir, under the contract that exist they would not be and we of course would look to the insurance company for their reimbursement.

Thurgood Marshall:

Mr. Edwards, suppose that the shopping center is set up in building which you called a bank and said that this is a limited bank, all we do is take in money and pay out money, we do not render any other banking services, would that be a branch bank?

Robert S. Edwards:

Yes sir, I think we would definitely have reached —

Thurgood Marshall:

(Voice Overlap) what’s the difference except you don’t have a big building, you just have a little truck?

Robert S. Edwards:

Well, to begin with we have no people there.

It simply a hole in the wall where you can go and leave it but the —

Thurgood Marshall:

You have messengers there?

Robert S. Edwards:

I beg your pardon.

Thurgood Marshall:

You have messengers.

Robert S. Edwards:

No sir, the messengers does not stay there, he simply calls picks up.

Thurgood Marshall:

If he goes there, he pick it up.

Robert S. Edwards:

Yes he does, very definitely.

Thurgood Marshall:

He picks it up.

Robert S. Edwards:

He does.

But the point being is that if we could go back to the night depository, we have a clear understanding by contract — the established night depository law that when you drop in to the night depository at the bank, you have not made a deposit.

And we believe that this definitive, this definition, is very important in defining this — the state versus the national situation and that it is a breaking point that it is the proper breaking point.

If we did set up this building that you talk about and render these services, we are clear — clearly within the deposit window situation that is anticipated by Congress and we believe that we still — or without that whenever we have rendered the service on this basis.

We would like to point out to the Court there’s a very definite and a clear reason for wanting to do this because it does render our service and it constitutes a banking service rather than branch banking which is prescribed by the federal and state law.

Hugo L. Black:

How would you characterize this as a branch or not a branch within the federal test theory, federal laws controlling, is the function of — the functional activity of the bank or other [Inaudible]

Robert S. Edwards:

Well, to begin with, I believe that when we start dealing with deposit law or contract law and move over into the functional definition rather than the strict contract law which now exists as well developed throughout the United States and it is now in our brief that we are beginning to deal with a lot of problems.

FDIC insurance coverage and many other areas so that if the Court would choose to say, “Well, functionally anything that looks like at depositor, smells like a deposit is,” I think you’ve opened the door to liability on parts of banks in night depository situations, in FDIC situations and many other situations that would be a very big problem and I think that this is an area that would — that should be looked out there closely based on the well-developed contract law as it now exists.

If I could say one thing concerning this competitive equality.

Competitive equality cannot be a mirror image in my judgment and by imposing the competitive equality that the Circuit Court has elected to do, the result of the situation has been that I as a federal — as a first — a national bank customer must go and ask my — supervisors, the Comptroller of the Currency, may I do this and once he says, “Yes, I can or no, then I must go ask the state supervisor also, “May I do this?”

In your judgment is a branch banking does — and if he says, “No I can’t,” I can’t.

The result of this situation is that I am placed in the — at the butt-end of the most restrictive ruling of either the state or the national comptroller.

And where the national comptroller says, “No, you can’t do it,” the State Bank still may be able to do it in this range or ambit of other competitive items and there are numerous but I cannot do this because I am held down by both of them.

Warren E. Burger:

Thank you Mr. Edwards.

Warren E. Burger:

Mr. Smith.

William Reece Smith, Jr.:

Mr. Chief Justice, may it please the Court.

Before I finally deliver what prepared remarks I have, I’d like to speak to some of the questions which arose from the bench.

I don’t want Mr. Edwards to appear to be the only expert on Plant City Florida here and as much as that’s where I was reared.

And the other bank, the State Bank, the Hillsborough Bank is the bank in which my family is interested, so we have a little local situation here.

Mr. Springer talked about the messenger riding the truck.

Somehow, it’s been overlooked that there’s also a trained, paid teller on this truck, trained by the bank to do all of the functions that a teller does in a bank.

Both of these gentlemen have referred to the depository as a hole in the wall in the shopping center.

I invite the Court’s attention to page 387 of the appendix in this cause to take a look at the hole in the wall.

What happened here was is that Plant City got its first large shopping center in its history and First National went out to that shopping center and rented a store and then set up its depository in the store within the interior mall next to the new chain stores which were moving into the community.

And when the shopping center opened, what happened?

First National got every new account, every large new account out of that shopping center because it got the advantage of location which is so important in banking.

The Hillsborough Bank, the older bank, the larger bank, the one that one might assume would get a little business out of it got absolutely not a new customer.

The picture shows that there’s a good deal and more there than a hole in the wall and that is my point.

Secondly, —

Byron R. White:

I take it that the Florida statute forbids the bank, Oh!

Never mind, go ahead, go ahead.

William Reece Smith, Jr.:

It does, sir.

We so interpret it.

William J. Brennan, Jr.:

Never mind.

Hugo L. Black:

Would you mind telling me what’s it at the core of this controversy?

William Reece Smith, Jr.:

Well, there are two arguments, Mr. Justice Black.

I think, first is, what is the test to determine branching under 12 U.S.C.–

Hugo L. Black:

I’m not talking about legally speaking, I’m talking about practically speaking.

William Reece Smith, Jr.:

Practically speaking, what is it the core of it is that the National Bank through the ruling of the Comptroller of the Currency which completely reverses the rulings that the Comptroller of the Currency had been making for over 40 years as to armored cars and as to depositories has gained a competitive advantage over the State Banks in the State of Florida in the performance of basic essentials of banking.

To use a not very polite term, the guts of banking, may it please the Court, are the getting hold of money, getting deposits.

The cash — paying of checks and the making of loans and Congress said under 36 (f) that anyone of those things which should be defined as a branch for purposes of 36 (f) and ultimately for purposes of reference to State Law.

Anyone of them and certainly one is clearly involved here which is receiving deposits and I’m talking about the functional act of receiving deposits, the getting the advantage of getting the money which is precisely what First National is doing.

Hugo L. Black:

That’s it — let’s take a village at a little distant from Plant City, 20 miles and you find that the Plant City sends this traveling bank or traveling whatever it is into that community and it can get the deposits.

Now, how can the State Bank at Plant City compete with it?

William Reece Smith, Jr.:

That’s right.

Except the — in —

Hugo L. Black:

Of course you’d say it should pass the law and not authorize it.

William Reece Smith, Jr.:

Oh!

Yes sir, it can.

But that’s a matter of policy that Congress left for local determination saying that a state would have to decide whether branching in this area should or should not be allowed.

[Inaudible] state bank can’t dictate state policy on those —

Hugo L. Black:

But they can send in their deposits by mail.

William Reece Smith, Jr.:

Yes sir, that is true.

They could do that.

Hugo L. Black:

Is that a satisfactory way of doing business?

William Reece Smith, Jr.:

A satis — its certainly not a satisfactory way to combat the armored car operations because it does a good deal more, may it please —

Hugo L. Black:

Do you take the position that the armored car is in effect a moving ambulatory bank?

William Reece Smith, Jr.:

I do indeed sir.

Under Section 36 (f), I do indeed.

It is an — that 36 (f) says, any place is the branch bank which is an agency, an office or a place of business where either deposits are received, checks are paid or money is lent and that’s precisely what’s involved here.

We’ve certainly — the armored car is either an agency or an office or a place of business.

So too is the depository.

We have lots of laundromats in that part of the world but you don’t have any people out there but they are certainly places of business and this depository in the shopping center is clearly a place of business where First National Bank gets a competitive advantage in the control of an essential of banking, that is receiving deposits and their only, only way they seek to avoid the argument which I make and the way that the Comptroller of the Currency said is the way the Comptroller of the Currency said they could.

The Comptroller as I have said, reversed himself.

They’re over 20 inconsistent rulings since 1929 with the ruling the comptroller made when he authorized this.

Hugo L. Black:

Why did — you said the rule had been otherwise for 20 years, what had been the rule for 20 years?

William Reece Smith, Jr.:

The Comptroller of the Currency had disapproved and discouraged armored car operations and depository operations of this sort on the ground that they were branch banking under 36 (f).

Hugo L. Black:

On the ground, is that in the record?

William Reece Smith, Jr.:

Yes sir.

We subpoenaed the complete precedence file of the Comptroller of the Currency.

We tried to take his deposition, they wouldn’t let us do that, but we got the complete precedence file and it is in evidence in this case.

Hugo L. Black:

They had been called branch banks for 20 years, this level?

William Reece Smith, Jr.:

The comptroller is saying that they were not authorized in states which were non-branching states because they would violate the provisions of 36 (f) and (c).

Do you quarrel with Mr. Springer’s argument of the so-called choice of law question?

Do you first have to look at this in terms of federal law?

William Reece Smith, Jr.:

I don’t know what Mr. Springer’s argument is, may it please the Court.

It may be precisely what ours is.

(Voice Overlap) The way you’ve been carrying you’re argument–

William Reece Smith, Jr.:

We–

I rather got the impression that you were not quarreling over that that you were locking more into the question as to whether this was a branch and not branch under federal law.

William Reece Smith, Jr.:

Respondents take this position, Mr. Justice Harlan.

We say that there are about four different views which have been advanced to you.

The first is that 36 (f) is to be narrowly construed without any reference whatsoever to the competitive equality upon which the Section clearly was based in its enactment.

We say that’s wrong.

We made this argument before the District Court.

It took that view but we say, even, even in that event, if that is the correct view, then we still should have prevailed because the contractual arrangement or fictitious the Court should look the form to substance, there is no real agency relationship and accordingly even by a common law principle, agent to the bank are authorized to receive deposits and are therefore receiving deposits off-premises.

That’s the first argument.

The second argument is, we made an argument that 36 (f) was exclusively def — exclusively federal.

It was a complete definition without any reference to state law, but it should be construed broadly and liberally for the purpose of effectuating competitive equality.

And this view incidentally is one of the position which is taken in a little pamphlet by the legislative reference section of the Library of Congress in evaluating certain of Mr. Saxon’s rulings and it suggests a broad construction.

We argued that construction before the District Court until we found Judge Lindberg’s unpublished opinion in State Chartered Banks then we had an authority better than a pamphlet from Library of Congress.

And so we began to rely without moving away from the other argument, but arguing in the alternative, we began to rely on Judge Lindberg’s State Chartered Bank’s decision which is that 36 (f) is a partial definition where function is the important thing.

Function and physicality that is presents a prima facie test of banking, of branch banking under the federal definition and if the operation meets that prima facie test, then the threshold is crossed and you look to State Law.

Now, we support that view before this Court and recommend it to this Court as being the best view.

It provides guidelines.

It’s flexible.

Hugo L. Black:

What did he hold?

William Reece Smith, Jr.:

Sir?

Hugo L. Black:

What did he hold precisely?

William Reece Smith, Jr.:

Judge Lindberg faced with a similar problem —

Hugo L. Black:

Where was he?

William Reece Smith, Jr.:

He is a District Judge in Washington sir and he was the one who — one of the ones who grappled with this thing in greatest depth first.

Hugo L. Black:

What did he hold?

William Reece Smith, Jr.:

He took the position that 36 (f) provided a partial functional definition of branch banking and that if a given activity met that functional definition then the threshold was crossed and one should look to state law.

Hugo L. Black:

Well, I suppose, you would admit this is a progressive service in the banking business, wouldn’t you?

William Reece Smith, Jr.:

Yes sir, I think, I would have to admit that but I would also point out that in 1927 in the Mc — at the time that McFadden Act was being debated, that there were many people who argued that branch banking was a progressive service.

That it offered service and convenience to the customer and Congress decided in phrasing the McFadden Act as it did and taking the approach that it did, that the question of service and convenience in this area should be left for local determination.

Hugo L. Black:

Is this national problem or a local problem?

William Reece Smith, Jr.:

I beg your pardon sir?

Hugo L. Black:

Is this a national or local problem?

William Reece Smith, Jr.:

In terms of the operation in hand, I would say, it was national sir.

I think it’s that the operations of this sort are being considered and battled all over the country.

Hugo L. Black:

I presume this system of making deposits is intended to supplant the old way of sending in the deposits by mail, is that right?

William Reece Smith, Jr.:

I don’t think it is, may it please the Court, I just — I think it’s a different method of operation in addition to sending them in by mail.

The advertisement of this bank, advertisers that they have banking by mail and say they also furnish this service.

To be perfectly candid sir, I see no justification for this operation whatsoever in the way that First National set it up except to gain a competitive advantage.

Hugo L. Black:

It seems to me that a justification to it pragmatically speaking, I thought you were arguing on the legal basis that it’s not fair competition.

I grew up in a town which was a village which was 400 people and 25 miles from the closest bank.

All our business was done by mail.

William Reece Smith, Jr.:

Yes sir.

Hugo L. Black:

And of course, that would’ve been — we would’ve had a great advantage.

We would have had this system of making deposits.

William Reece Smith, Jr.:

Yes, sir, I understand that.

And my response to the need of your village sir was that — is that in the context of this lawsuit, if the service was needed and the State of Alabama decided that it should allow the activity then that’s properly the case but it was for Alabama to decide that and not for the Federal Government when one is dealing with the three essential functions here.

I say not with the Federal Government, I don’t really mean to say that because Congress can change the definition of 36 (c) and 36 (f) if it wants to.

Congress can take an entirely different approach, but I respectfully submit that it is solely for Congress to do it and it is not for the Comptroller of the Currency by rulings, it’s not for the First National Bank of Plant City and indeed with respect, it’s not (Voice Overlap) —

Hugo L. Black:

And you’re telling that Congress hasn’t done this, but the Comptroller of the Currency?

William Reece Smith, Jr.:

That’s correct.

Hugo L. Black:

It abandoned the old practice which has been existing for 20 years and done this and then it violates the Federal Law, is that it?

William Reece Smith, Jr.:

Yes sir.

That is precisely my point.

Thurgood Marshall:

Mr. Smith, do you know how many states prohibit this type of action?

William Reece Smith, Jr.:

No sir, I don’t.

I don’t know that much about banking.

William Reece Smith, Jr.:

Mr. Bell who’ll speak in a few minutes and he is much better informed in that area than I am.

Potter Stewart:

Is this precedence file or whatever you call it in the appendix?

In appendix (Voice Overlap) —

William Reece Smith, Jr.:

Not in the appendix, no sir.

Potter Stewart:

But is in the original record.

William Reece Smith, Jr.:

It is in the original record, yes sir.

Warren E. Burger:

Mr. Smith, if an independent contractor in your city set up an armored car service, having no connection with any bank, could he — would he be prohibited or controlled in any way by the local banking laws of Florida in performing precisely the same service that’s performed here as agent for the putative depositors?

William Reece Smith, Jr.:

No sir, he would not, so long as he was a common carrier for hire and had certificate from our public utilities commission.

Warren E. Burger:

He’d merely have to have the same kind of relations than that of a bus company or a truck line would have; a local?

William Reece Smith, Jr.:

For the purpose of going out to say a large commercial customer who wanted its moneys taken into the bank but there’s a great distinction, may it please the Court, between the Brinks for example, offering that service and the First National Bank in Plant City either offering it through its own armored car are alternatively through First National hiring and controlling Brinks.

Warren E. Burger:

Let me pursue it a little bit in the situation that I set up hypothetically, the customer would have to pay for the service of the transit, would he not?

William Reece Smith, Jr.:

Yes sir.

Warren E. Burger:

Would it violate any banking law of Florida if the bank offered to reimburse any — credit the account of any customer for whatever amount he had to pay for that transit service?

William Reece Smith, Jr.:

I’m not sure sir.

I think the Public Utilities Commission of Florida is going to have a little of this before its over because when the bank begins to receive money for the service, it is in my judgment at least going to be involved in operating common carrier for hiring, we’re going to have a new battle over that setting.

That’s the reason, they’re not charging at the present time.

They’re afraid to.

Byron R. White:

Mr. Smith, I take it that the Florida statute which requires that a banking law do all of its business in one place would might well bar things that aren’t — that no one would call branch banking.

William Reece Smith, Jr.:

Yes sir, I think that is possible, it could do that.

Byron R. White:

If the bank wanted to set up a new business office in some new development, put an agent out there to give him an office to develop some customer.

I suppose banks have their new business people going out, calling on people all the time, don’t they?

William Reece Smith, Jr.:

Well, I think we have to be careful with our example, Mr. Justice White but to take an easy one; the bank can operate a travel agency, a state bank can operate a travel agency in Florida as part of the business of banking and I certainly wouldn’t get —

Byron R. White:

Is it — you can do it as an (Voice Overlap) to do it in the premises?

William Reece Smith, Jr.:

Sir?

Byron R. White:

Does it — they’d have to do it on the banking premises?

William Reece Smith, Jr.:

So far as I know, it does it on the premises, yes sir.

Byron R. White:

But generally, you would think that the — if possible, the Florida law might prevent things that aren’t franchise.

William Reece Smith, Jr.:

I think that is possible, yes sir.

Byron R. White:

And that the federal — and that a National Bank could engage in those practices because they aren’t branching?

William Reece Smith, Jr.:

That is correct sir.

Byron R. White:

And that’s the argument here, I suppose.

The argument here is that —

William Reece Smith, Jr.:

That the argument here is the reverse of that, yes sir.

Byron R. White:

The argument here is that all the bank — Plant City Bank argues this isn’t a branch and therefore it can do it, no matter what federal — no matter what Florida law is.

William Reece Smith, Jr.:

Well, we go back to the test, how do we get there?

In the first place, is this an activity which falls within 36 (f) from a functional point of view.

Does it involve the basic essentials of banking?

We say that it does.

Therefore, the reference must the state law.

At that level, national and state banks will be treated exactly the same —

Byron R. White:

But you were saying —

William Reece Smith, Jr.:

— by Florida law.

Byron R. White:

Anything that the — anything that federal law, that Florida law would call a branch would control 36?

William Reece Smith, Jr.:

No sir, I don’t make that argument.

I make the argument that first, federal law —

Byron R. White:

But isn’t that the word branch isn’t in the Florida statute at all?

William Reece Smith, Jr.:

That is true sir.

I make the argument that when one is dealing with the essentials of banking as is the case here, that in order to determine whether the activity is a branch, you first must apply 36 (f).

In the event that the activity is one of those three things then the reference is the state law.

Byron R. White:

As to that — because, once it sets its — does one of those three things, it is a branch for purposes of federal law, you say.

William Reece Smith, Jr.:

It is a branch for purposes of 36 (f), yes sir.

William J. Brennan, Jr.:

Well, that’s because in your view, that’s a place at which deposits are received, is that it?

William Reece Smith, Jr.:

That is correct.

William J. Brennan, Jr.:

So that using the illustration that you suggested yourself of a travel agent, if out this shopping center, this national bank maintains not to strap but they — travel agency service at that place.

It might be that Hillsborough would be prohibited from doing that by Florida law, but I gather under your view of the branching provision, 36 (f) and that would be inapplicable to the maintenance of a travel agency, isn’t it?

William Reece Smith, Jr.:

Yes sir, I think that result can be reached Mr. Justice Brennan.

William J. Brennan, Jr.:

So there — so to that extent, there could be an inequality of competition.

William Reece Smith, Jr.:

That is true and Congress was not concerned with and did not try in the McFadden Act in this branching area to give complete equality.

We don’t contend that complete equality is required.

We contend that a competitive equality is required as to the basic functions of banking and that no contract, no notice can change the fact that what First National doing here is getting control of money off-premises.

William Reece Smith, Jr.:

The contracts don’t mean a hill of banes to the local expression, excuse me.

Warren E. Burger:

It’s local in quite a few places.[Laughter]

Hugo L. Black:

May I ask you what, what is meant by on pages — the pictures you showed us on page 389.

That shows that the names indicate that the armor car carries two bank tellers, is that true?

William Reece Smith, Jr.:

I’m sorry sir.

I can’t hear you.

The reading seems to indicate that the armored car carries two bank tellers, is that correct?

William Reece Smith, Jr.:

They never put two aboard sir but that is an interesting fact.

It is — the presentation has been made here that they — they only were — or doing a rather limited thing but it must be remembered that this litigation broke out almost contemporaneously with the commencement of these two operations.

And the early advertising within days before the litigation commenced, as Mr. Justice Black notes on page 389 the record says, Richard was the bank’s president, described the car as a mobile drive-in, staffed by an armed guard and two tellers.

It has a large window where customers may be served and a communication system.

Now, they contend that they haven’t served any customers from this counter, this complete teller’s window which is on the side of it.

Hugo L. Black:

What’s the difference in that and a — if any and I presume there must be some.

William Reece Smith, Jr.:

That it’s just —

Hugo L. Black:

Than a regular bank if you go to in your car and you stand there in your car and give the money to the teller?

William Reece Smith, Jr.:

There’s none sir.

And at that place that to which you refer, they are receiving deposits and therefore, if they do it to the armored car, they are likewise receiving deposits.

There is one point that I would like to refer to before it slips my mind.

The presentation is — has been made here that all that is — has happened in this operation is that money has been delivered to customers and picked up and brought back.

This is done routinely, six days a week by the armored car.

The armored car calls upon the depository, twice everyday.

At the depository, it is not only night bags that are placed into the depository, but also envelopes containing the transmittal slip which is really just a regular deposit slip with the conjured language on the back of it in trying to make an agency out of it and this is the most important point because it should resolve this case below and we should have never been here.

The District Court held as a matter of fact that the First National was paying checks through this operation because it would actually deliver the cash to a customer, say it, over a cash store and take a check in return drawn on the bank that is paying checks, that’s a Section 36 function.

But the District Court strangely enough said, it isn’t going to approve that, but it will approve the rest of the operation because the First National is otherwise substantially complied with the Comptroller of the Currency’s ruling.

And we’ve never been on this — we’ve constantly argued that this was wrong, we made this point to the Fifth Circuit but the Fifth Circuit didn’t reach it.

We do not see how if in the course of the operation of the armored car.

There was a paying of check operation that that can be ignored for the purposes of definition of 36 (f).

The argument is made that the question is moot because First National promised to stop it, but number one, the record doesn’t show that they stopped it; number two, they’re not restrained by the District Court from doing it; number three, we are restrained from interfering with them, so we can’t find out what’s going on; and number four, the promise to stop a wrong — sir?

Potter Stewart:

Not in other (Voice Overlap) you’re restrained from doing what, from interfering with them?

William Reece Smith, Jr.:

With these operations.

Potter Stewart:

What, by some sort of an injunction?

William Reece Smith, Jr.:

By the District Court’s —

Potter Stewart:

No, he has decided against you.

William Reece Smith, Jr.:

Sir?

Which decided (Voice Overlap)?

Potter Stewart:

You were the plaintiff.

You were the plaintiff, there’s no restraining order.

William Reece Smith, Jr.:

No, we were the defendant.

Potter Stewart:

That’s right, I see that, but is there a restraining order against you from interfering with them?

William Reece Smith, Jr.:

There is actually, the order wasn’t entered —

Potter Stewart:

I just didn’t understand (Voice Overlap) —

William Reece Smith, Jr.:

— because the parties agreed to abide by the Court’s decision but it’s the same thing.

Potter Stewart:

Well, from what kind of interfering with them?

I just didn’t understand your point three.

William Reece Smith, Jr.:

From interfering with these operations in any way.

See, I now — I’m speaking here not only for the intervener state banks whom I represented in the first instance but I speak here also for the State Comptroller —

Potter Stewart:

State Comptroller —

William Reece Smith, Jr.:

— of the State of Florida and the Court entered an order that the Comptroller at the State of Florida should no longer interfere with these operations by First National Bank.

Potter Stewart:

I thought you were speaking on behalf of the – of your bank.

William Reece Smith, Jr.:

No sir, I’m trying to wear two hats here.

I’d like to make this particular point because we think it’s most important.

The argument is made that the use of these contractual arrangements are not subterfuges.

It is now been suggested that they have some sort of a practical value.

This record will not support that whatsoever.

We made the argument from the commencement and sought to prove it as much as we could, that the use of these contractual arrangement was solely for the purpose of evading the effect of federal law and particularly the effect of 36 (f) and 36 (c).

We showed that the Comptroller had reversed himself when the Comptroller became Mr. Saxon.

We showed that Mr. Saxon’s letters in explaining his rulings, expressly said that the contractual arrangements were used so that 36 (f) should not be applicable.

We also showed that First National Bank by its letters to the comptroller expressly said that we are using these contractual arrangements because exactly as you required.

These were used for the purpose of meeting the Controller’s regulation and avoiding the effect of Section 36 and for no other purpose.

Now, it’s been suggested that there might be another legitimate reason for using the contracts, the contractual arrangements.

William Reece Smith, Jr.:

That simply won’t hold water.

All one has to do is to look at the two basic contracts that are involved, the so-called dual comptroller contract on page 91 of your appendix and the so-called transmittal slip on page 1 to 23 of your appendix.

And any lawyer reading that can see quite clearly that there wasn’t any attempt here to limit liability.

These are vastly different in language from the classical night depository agreement where specifically a bailment is spelled out.

The District Court did not make a finding of fact that First National was not receiving deposits off-premises.

The District Court said as a matter of law that these contracts are clear and unambiguous on their face and the District Court therefore refused to consider the purpose, the intent of the contract whatsoever.

We made the same presentation to the Court of Appeal.

The Court of Appeal agreed with us and the Court of Appeal expressly says that it — it finds plaintiffs’ arguments of agency and a contract indefensible.

It finds that it’s engaged in the use of paper evasions and admittedly, parties can contract, a bank and its customer can contract as to when a deposit is received.

But this cannot be done for the purpose of frustrating public policy for the purpose of evading law and that is precisely the only reason these arrangements were used and one can look all day but with an honest heart, you can find no other answer but that.

Now, I’d like to say —

William J. Brennan, Jr.:

Mr. Smith.

William Reece Smith, Jr.:

Yes sir.

William J. Brennan, Jr.:

Your position doesn’t depend upon with succeeding with that argument, doesn’t it?

William Reece Smith, Jr.:

Sir.

William J. Brennan, Jr.:

Even if these are perfectly [Inaudible] by the Constitution?

William Reece Smith, Jr.:

We’ve made that —

William J. Brennan, Jr.:

They set up all of these relationships just as a — I gather, you would still argue that this is a service which is a branching service, isn’t it?

William Reece Smith, Jr.:

Yes sir, we’ve made just about all the alternative arguments that we could and we take that one too.

We do think however that that’s very — that is an important point, Mr. Justice Brennan.

William J. Brennan, Jr.:

Well, but that, I just want to be clear, you don’t think it’s so important that your case stands or falls on your succeeding here?

William Reece Smith, Jr.:

No sir, we’ve argued as I’ve said, four different points of view, all bringing us to the same conclusion.

Byron R. White:

Neither did the government?

William Reece Smith, Jr.:

The Government hasn’t advanced that argument.

I would like to close by saying one thing about the Fifth Circuit’s opinion.

It’s been urged that the Fifth Circuit’s opinion doesn’t follow the Judge Lindberg approach which we urged before it, but that somehow, it brings into effect a fourth point of view, a fourth approach which is that the policy of competitive equality is so pervasive that virtually all of premises operation are going to be defined by State law.

We do not support that view as respondents, but I will confess, we’ll be perfectly glad to accept it because our point here is to win a lawsuit and that point of view will win our lawsuit as well as the others will.

We do say however that the Fifth Circuit holding does not stand for that proposition.

The Fifth Circuit did not hold so broadly.

And we call attention to this fact.

William Reece Smith, Jr.:

The Fifth Circuit’s opinion must be read in the context of the arguments which were made before it.

We argued alternative positions as we do here, but we argued primarily first that the contractual arrangements are evasions to obviate the effect of Section 36 (f) and to frustrate competitive equality.

Secondly, we relied upon the functional test set forth in Judge Lindberg’s opinion.

And thirdly, we said that this approach made Florida law applicable.

And the fifth court expressly holds seriatim.

First, that it rejects petitioner’s arguments of agency and contract, that it finds the contractual arrangements and attempt to evade the wishes of Congress, that Judge Lindberg’s approach is approved and only then does the Fifth Circuit look to the Florida law.

Hugo L. Black:

Is your basic argument that this is a branch plan?

William Reece Smith, Jr.:

Sir?

Hugo L. Black:

Is your basic argument that this messenger service (Voice Overlap) —

William Reece Smith, Jr.:

Is a branch bank for (Voice Overlap), it is sir for the purposes of Section 36 (f), for the purposes of determining whether it is a branch at — Section 36 said —

Hugo L. Black:

Does the building use it — the place you pointed out, have a sign in it showing that that’s a branch, that’s the bank?

William Reece Smith, Jr.:

Yes sir.

Hugo L. Black:

(Voice Overlap) bank premises?

William Reece Smith, Jr.:

Yes sir, and lots of nice sign both on the side of the armored car and in the depository area.

Hugo L. Black:

In the depository?

William Reece Smith, Jr.:

Yes sir, there is no question.

Hugo L. Black:

Where is that depository?

William Reece Smith, Jr.:

It’s on the inside mall of the city’s only large shopping center, right next door to all of the new chain stores that moved in to town.

Hugo L. Black:

And has a sign there (Voice Overlap) —

William Reece Smith, Jr.:

And says this is the First National Bank’s messenger service.

The point I make is an important — the point I make is an important one for this reason.

As I pointed out, number one, First National got all of their big accounts out of this shopping center because of the location of its depositories.

Secondly, at the time that First National sought authority from the Comptroller of the Currency for these two operations, the Hillsborough Bank was building its first new bank building in 40 years.

It was the only bank in Plant City that survived the depression and it took a long time to get enough money to build a new bank.

First National, rather, Plant City’s Hillsborough’s banking experience had indicated that within a given period of time, the deposits at the Hillsborough because of the new building should increase by about $2 million.

When that time arrived, the deposits had increased only $200,000 and by that time, First National was handling over a $1 million a week through this service ranging over 18 miles going into additional trade areas serving, incidentally, Mr. Justice Black, the little city of Dover is served by this armored car.

Hugo L. Black:

What?

William Reece Smith, Jr.:

A little city of Dover, Florida and it’s a good deal more than two filling stations.

Hugo L. Black:

Is there any other bank there?

William Reece Smith, Jr.:

No sir, there is no bank there.

William Reece Smith, Jr.:

Of course, it’s argued in briefs that these things which the First National has got and the Hillsborough lost just show the value of the service of convenience.

But I point out again that this is precisely the question which Congress was concerned with when it faced this problem in enacting the McFadden Act and it held a service and convenience is the question for local determination.

And if that’s to be changed, if operations off-premises that affect the basic like blood function of bank are to be, or not to fall within Section 36 (f), we submit that it is solely for Congress to make that decision.

Thank you.

Warren E. Burger:

Mr. Bell.

James F. Bell:

Mr. Chief Justice and may it please the Court.

The 50 officials of the State Government responsible for the supervision and regulation of the 6,400 State chartered banks of the country have filed in a brief as an amicus curiae with this Court urging affirmation of the decision of the Court of Appeals.

Now, because both our position and the opinion of the court below had been characterized in a manner by the petitioners with which we do not agree, I would like at the outset of my argument to pose the issue as we see it and its resolution by the Court of Appeals below.

Now, the petitioners argued that the determination of what off-premise business activities of a national bank amount to a branch is governed exclusively by 36 (f).

And they contend that all that is involved in a case of this type a technical analysis of the understanding between the bank and the customer in the light of applicable agency contract of commercial law to determine whether there’s been a loan, deposit or check transaction away from the bank’s business.

Now, if there has been no transaction, there’s no branch and no reference to state law is required or permitted in this analytical process.

Now, under this reasoning, the Comptroller of the Currency has recently ruled that national banks are not branching when they engage in the check cashing or deposit making process through off-premise shopping center depositories or mobile facilities or when they engage in a loan making process through off-premise loan production offices.

Now, if the result is to — is a competitive disadvantage for state banks who have prohibited such activity by state branch policy embedded in state law, the petitioners assert that this is precisely what Congress intended.

Now, the construction of Section 36 (f) which we support, which is the principal argument presented by the respondents and which is the one reflected in the decision of the Court of Appeals is this, the Court of Appeals started with this Court’s decision in the Walker Bank case and there this Court has exhaustively studied the legislative history of the branching provisions of the McFadden Act of 1927 and the Banking Act of 1933 and reached the conclusion that the dominant intent of Congress was to establish competitive equality between national and state banks in the matter of branching based on State law.

And the Court then concluded that the only way to reconcile Section 36 (f), the definitional section and Section 36 (c), the branching section within the framework of this Congressional intent, was to consider Section 36 (f) as a functional definition.

If there is an off-premise facility at which activities are performed, essential to the loan, deposit or check paying process, then reference must be made to state branching policy in a state law to determine if the off-premise activity would be a branch.

Now, in other words, the Court of Appeals considered Section 36 as a substantive definition of essential banking functions not as a technical delineation of the party’s rights.

For the whole controversy in the McFadden Act of 1927 when both Section 36 (c) and (f) were adopted and later in the Banking Act of 1933, revolved around the dispute between unit banking and branch banking.

And in the real world of banking, the resolution of that dispute is not made by a contractual relationship described in small print on a transmittal slip.

It is made by a determination of the extent to which banks can compete off-premises in the functional essentials of banking, loans, deposits and checks.

Now, that is what the Court of Appeals did and there is no conflict or obscurity about it.

It said that if no matter how you look at it, unless you want to throw away all the concepts of the functional business of banking, the off-premise activities in the case, in this case, inaugurated by the petitioners below involved a deposit-making process and a similar determination had been made by the state chartered banks case court and so they turned to state law and found that off-premise activity would be prohibited.

State banks under the branching policy of the State as reflected in its state branch statutes and they therefore concluded, it would be unlawful for national banks and that is the decision which we too seek.

Warren E. Burger:

Would you agree that Congress could authorize national banks to do all the things that are challenged here?

James F. Bell:

Yes Mr. Chief Justice.

There’s no argument that the Congress of the United States could have given national banks this authority.

The question is one of statutory construction did it.

Now, I would like to turn, if I may, at this point to some of the lines of arguments advanced by the petitioners against this position.

The first one, I think frankly it is directed to the wrong forum, to the Courts rather than to the Congress, but basically it’s this.

Imaginative and vigorous national banks are developing modern concepts of banking which would be frustrated under the ruling of the court below because it would subject national banks to unfriendly state legislation construed by unfriendly state banking departments and would result in a disparity of treatment of national banks by the various states.

James F. Bell:

This line of argument errs on at least six accounts.

First, there is a disparity of treatment of national banks by the various states in the matter of branching today.

12 permit unlimited branching, 15 prohibited altogether and the remaining 23 adopt a middle ground with widely varying restrictions offering some of the benefits of banking, but trying to protect small country banks, for example, by expansion of city banks.

So, diversity was specifically intended by Congress when it rejected the concept that branching should be determined by federal law.

So, the very diversity that the petitioners decry is what Congress wanted because in every state, there are differing economies as well as divergent issues on the issue of branch versus unit banking and Congress sought to adopt that standard as a measure of off-premise or branching activities of banks.

Second, with regard to this high qualification of unfriendly state legislation, the idea that a state is a going to pass branching legislation designed to hurt national banks, when that legislation is equally applicable to state banks, is simply totally unsupportable.

And when petitioners make this assertion, all they are doing as opponents of unit banking are saying they don’t like any restrictions of branching, but that is a matter which Congress has decided the state should decide.

Now, somehow, the third, the concept that imaginative national banks are trying to keep up with the times and are being rewarded is deserving of the same answer.

For what may be imaginative expansion to some may spell a break down in unit banking and banking concentration to others.

Mr. Hanson has filed a brief for the Independent Banker’s Association making this point very strongly.

Now, there are states which permit precisely the type of activity for which petitioners argue here, California for example.

But those states with a strong policy favoring unit banking such as Florida do not and there are arguments on both sides of this issue.

Congress has said State legislatures should be the forum and national banks as well as state banks can go into a state legislature anytime they want to, to change the policy of their state.

Fourth, the concept that the decision below somehow rather places national banks at the mercy of supervisors or indeed as the Comptroller posed the question this morning that state banks supervisors can prevent something, we believe is totally unwarranted.

The source of state law is not supervisor imagination but the statutes of a state reflecting its branch banking policies.

Now, this whole field of off-premise activity is relatively new today.

So, there are not many State judicial decisions and as each instance arises, the questions comes up is this in accord with or contrary to the branching policy of the state.

And in the absence of judicial decisions, supervisors usually seeking the advice of the State Attorney’s General have been called upon to construe the statute.

Now, each ruling is non-discriminatory, equally applicable to both state and national banks.

Each ruling is subject to judicial review for its correctness and indeed as has been pointed out here, the ruling of the supervisor of Florida itself is now before Florida courts for decision.

Now fifth, the argument of the Comptroller that somehow the result of the decision below is tantamount to supervisor approval of Comptroller decisions is equally without merit.

Of course, the comptroller doesn’t have to seek supervisor approval of his decisions, but since Congress has provided a statutory framework with an intermeshing of Federal and State law relating to branching, surely that doesn’t mean that an iron curtain has to descend between the comptroller’s office and the state supervisors.

Consultation as to the meaning of state law is not tantamount to supervisor approval of the decisions of the comptroller.

And indeed, the Sixth Circuit in the Wayne, Oakland Bank case has held that this intermeshing demonstrates that Congress intended consultation and cooperation between the two agencies.

Now, also and finally, the petitioners in their supporting amici have compiled a fearsome list of activities which they assert that state supervisors can strike down under the decision of the court below on the guise of their branches forbidden under state law.

Now, the functional definition of Section 36 (f) does not go to all banking activities, it goes to the essentials of banking activities relating to loan, deposits, and checks and therefore, such activities assigning a trust agreement in a law firm’s office and turning that law firm’s office into a branch clearly wouldn’t even pass the functional definition.

Banking by mail, new business solicitation clearly doesn’t have off-premise additional office or facility.

So, what we’re talking about here is that a loan, check, or deposit function of a type where there is a competition with other banks in the — for the public for the banking business.

Because that’s what the preservation of the unit banking system and those states that have adopted depends upon.

When you go out and set up a facility such as the set up in this case and get a million dollars worth of deposits in a week, it is darn competitive facility and this is what the Court — this is what the Congress was talking about when it was talking about giving the States the right to determine whether or not you are going to have a unit or a branch banking system.

James F. Bell:

If you really follow the Comptroller’s argument to its ultimate decision, what he is saying is that anything that goes on in a main banking office can go on anywhere else as long as you surround it with the whole bunch of agency contracts or other types of contractual relationships so that the ultimate responsibility or the technical completion of a loan, check or deposit process doesn’t take place until you have gotten back to the main banking office.

And if national banks can go into a shopping center and set up a loan production office here and right next door, a depository with a desk, etcetera and right to next to that, a whole series of customers where you can pick up checks and cash by mobile deposits, I ask the question, who needs a branch?

Obviously, —

Byron R. White:

Could you draw any distinction in your own line between the armored car service and the depository?

James F. Bell:

Well, the armored car service —

Byron R. White:

For purposes of Section 36?

James F. Bell:

No sir.

In my opinion, they are — both involve essential elements relating to the deposit — make deposits.

Byron R. White:

But you have to call — can you really call an armored car service that’s moving around a place of business?

James F. Bell:

I think that’s —

Byron R. White:

Or a branch office or a branch agency?

James F. Bell:

It’s an additional —

Byron R. White:

Or a branch?

James F. Bell:

It is a place of business, I would suggest, Mr. Justice White.

Byron R. White:

A branch or place of business?

James F. Bell:

It is a branch, place of business —

Byron R. White:

[Inaudible]

James F. Bell:

— at which essential activities relating to the deposit making process are going on because I do not see how you construe, can construe Section 36 (f) in any other way and still reconcile it with the basic competitive equality of Congress.

Byron R. White:

Do you think the president of the bank every now and then stops by a customer’s place and picks up his deposits; that’s a branch place of business?

James F. Bell:

No sir.

I think that if you’re talking about new business solicitation —

Byron R. White:

Because (Voice Overlap) under 36, you don’t only need the acceptance of deposits but you need to have those accepted at a place of business.

James F. Bell:

Yes sir.

I think that there always are going to be gray areas in any operation of this type but I think if you look at Section 36 (f) within the framework of what Congress was trying to achieve, competitive equality with regard to the banking business and locations of the banking business that the construction of the court below was the correct one which was to refer to the state grants policy as reflected in state statutes.

Now, you’re asking me a whole series of hypotheticals under the state law.

Byron R. White:

Also you think [Inaudible] this is hypothetical because an armored car service is here as well as the depository.

James F. Bell:

Yes sir.

I think the deposit —

Byron R. White:

[Inaudible] hypothetical about that.

James F. Bell:

The depository and the armored car service are essential elements relating to the depository —

William J. Brennan, Jr.:

[Inaudible] together or does each separately a branch place of business?

James F. Bell:

They are together in the sense of the —

William J. Brennan, Jr.:

[Inaudible] only the armored car service without the supermarket or a shopping center depository.

James F. Bell:

No sir.

I think that if you can — if the — that if you can go out and serve your comp — your customers in a 20-mile area of your bank, to say that you are operating solely within the framework of your main banking business is simply impossible within the framework of branch policy definition.

William J. Brennan, Jr.:

Well, (Voice Overlap) your position is if we had built depository at the location of the shopping center.

If there were none there, he would still say that there was a branch place of business in the armored car service alone.

James F. Bell:

If it was going out to pick up deposits from a customer’s place of business.

William J. Brennan, Jr.:

Well, (Voice Overlap) we’re stopping at these various chain stores, establishments rather than going to depository [Inaudible]

James F. Bell:

Yes sir, clearly, because you could not compete, where the bank that didn’t have that authority, if you couldn’t do the same thing.

Warren E. Burger:

Your time is up.

Mr. Springer, Mr. Edwards, Mr. Smith, Mr. Bell, we thank you for your submission.

The case is submitted.