The Kansas Bank Depositors' Guaranty Act is not unconstitutional
as against national banks either because it discriminate against
them in favor of state banks, impairs the obligation of exiting
contracts, or deprives them of their property without due process
of law.
The statutes of the United States, where they do not prohibit
competition with national banks, do not forbid competitors to
succeed.
Contracts made after a law is in force are made subject to it,
and impose only such obligations and create only such property as
the law permits.
The constitutionality of this statute has already been upheld as
to state banks in
Assaria State Bank v. Dolley,
219 U. S. 121.
179 F. 461 affirmed.
The facts, which involve the constitutionality of the Kansas
Bank Depositors' Guaranty Act, are stated in the opinion.
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a bill to restrain the putting into operation of the
Kansas Bank Depositors' Guaranty Act, and to have it declared
unconstitutional.
Page 228 U. S. 4
It seems to have been filed at about the same time as the bill
in
Assaria State Bank v. Dolley, 219 U.
S. 121, in which case the law was upheld. The main
difference between the two suits is that the other was brought by
state banks, and this by national banks. The circuit court of
appeals held the bill bad on demurrer, 179 F. 461, and it was
dismissed. A writ of certiorari was denied by this Court. 218 U.S.
673. In view of the decisions in 216 U.S. and in this case below,
we shall add comparatively few words.
The ground peculiar to this case is an alleged discrimination
against national banks. Allegations in the bill as to the purpose
and intent of the statute, of course, are immaterial. They
introduce no new facts, and leave the question as it would be
without them -- namely, whether anything can be discerned in the
terms or effect of the act that infringes the plaintiffs'
constitutional rights. A good deal of the argument seems to be that
the statute will make state banks so attractive to the public that
the national banks will suffer. It is replied that experience has
not justified the prophecy. But even if it had, there is nothing to
hinder the states from permitting a competing business and doing
what Kansas has done with intent to make it popular and safe. The
national banks are free to come into the scheme. The suggestion
that they could not come in and remain national banks is simply a
statement of the situation of all competitors. They cannot retain
the advantages of their adverse situation and share those of the
parties with whom they contend. The statutes of the United States,
when they do not attempt to prohibit competition with national
banks, do not forbid competitors to succeed.
The specific discrimination pointed out is that, under the
Kansas statutes, the national banks do not share equally with
depositors in the assets of an insolvent state bank. The bill
alleges that the plaintiffs necessarily have
Page 228 U. S. 5
and make deposits with state banks, and that banks necessarily
borrow money from other banks and rediscount paper in other banks,
and that the obligation of their contracts will be impaired and
they will be deprived of the property without due process of law,
contrary to Article I, § 10, and the Fourteenth Amendment of the
Constitution. The section of the statute specified as having this
effect is § 4, which contemplates the primary application of the
assets of the bank and the double liability of stockholders to
depositors. It is replied that the word "depositors" obviously was
used by mistake for "creditors," and that the statute was amended
by substituting the latter word in 1911. (March 13, 1911, Sess.Laws
1911, c. 62, p. 103, § 1.) But, further, the language of the bill
and the argument show that the complaint refers to future
transactions, not to past. There is nothing sufficient to raise a
question as to dealings before the law went into effect. Contracts
made after the law was in force, of course, are made subject to it,
and impose only such obligations and create only such property as
the law permits.
Denny v. Bennett, 128 U.
S. 489,
128 U. S. 494;
Cross Lake Shooting & Fishing Club v. Louisiana,
224 U. S. 632,
224 U. S.
638-639.
The greater part of the bill is taken up with objections to the
scheme of the statute, in which the plaintiffs have no concern, and
that have been disposed of by the former decision of this Court
upon the Kansas act. There is nothing in it that calls for further
remark.
Decree affirmed.