power to readjust districts. In other words, would the power to readjust districts, which is expressly conferred upon the board, be nullified or rendered impotent if the power to abolish districts and banks is withheld?

I have not heard that contention made and I do not see how it could be made. Obviously, the power conferred can fall short of the power of abolition and still have a wide and useful field of operation. From time to time much may be done to promote the convenience and efficiency of the system by readjusting the boundaries of districts, adding here and taking away there, without abolishing districts and without abolishing banks.

The only grounds upon which a power may be implied are thus lacking here. Rather, the specification of the power to readjust districts and of the power to increase the number of districts carries with it the implication with it the implication that Congress did not intend to grant the greater power to abolish districts. As the Supreme Court has said in similar circumstances: "If Congress had decided to grant such authority it would have been easy to say so in express terms." (Tillson vs. United States, 100 U. S. 43-46.)

I sum up my conclusions as follows:

First-Concededly the power to abolish federal reserve districts and federal reserve banks is not conferred upon the Federal Reserve Board in express terms.

Second-It is a rule of statutory construction that the failure to grant in express terms a power of such great consequence raises a convincing presumption that Congress did not intend to grant it.

Third-Putting out of view that presumption, there is no provision in the act from which an intention to confer this power can fairly be implied, but on the contrary there is a provision which shows affirmatively that Congress did not intend to confer it.

Fourth-The absence of any mention of such a power in the reports of committees and the debates dealing with the legislation shows that the thought of conferring it was not in the mind of Congress. I am of the opinion, therefore, that the board does not possess the power in question. Very respectfully,

T. W. GREGORY, Attorney General.

THE PRESIDENT, The White House.

One question that the opinion raises is whether the action of the Federal Reserve Board in transferring northern New Jersey from the Philadelphia reserve district to the New York reserve district was legal. Under the Attorney General's opinion there can be no changes made by the Federal Reserve Board in the geographical boundaries of federal re

serve districts. The twelve districts designated by the organization committee must stand as constituted.

It may be added that it does not seem reasonable to suppose that Congress would have authorized the organization committee to establish these very elaborate banking units if another body to be organized only a few months later was to have the power not only to make readjustments among them but to abolish altogether a substantial number of them.

The power of readjusting districts and of creating new districts conferred by this provision upon the Federal Reserve Board is subject to two limitations only: (1) There must be "due regard to the convenience and customary course of business," and (2) the number of districts cannot exceed twelve. (Section 2).

If, therefore, the power to readjust districts includes the power to abolish districts, there is nothing to prevent the board from abolishing districts and banks until the number is reduced not only to eight, but to six, four, or even one, if the judgment of the board with due regard to the convenience and "customary course of business," dictates that policy.

But not only does this provision afford no sufficient basis for implying that Congress intended to grant the power in question-there is another provision in the act which shows affirmatively that it did not intend to grant that power.

Section 4 provides that "upon the filing of such certificate with the Comptroller of the Currency as aforesaid, the said federal reserve bank shall become a body corporate and as such, and in the name designated in such organization certificate, shall have power ** to have succession for a period of twenty years from its organization, unless it is sooner dissolved by an act of Congress or unless its franchise becomes forfeited by some violation of the law."

Assurance by Congress obtains that a federal reserve bank shall have the right to exist for a period of twenty years, except in two contingencies, unless it shall forfeit the

right by a violation of law, or unless Congress itself shall shorten the period.

The federal reserve banks were organized and their capital subscribed, on the faith of that express assurance of enjoying that right.

To imply a power in the board to abolish these banks at will would directly conflict with the powers expressly conferred upon them by this section. A power thus conferred cannot be seriously impaired by implying a conflicting power at least not unless the grounds for the implication are irresistible, which is not the case here.

Naturally, however, the Attorney General considered only the law of the matter. Profit from operation is not the object of the organization and there are times when loss from operation may be a public duty.

COMPTROLLER OF THE CURRENCY WOULD STOP PERSONAL USE OF OWN DEPOSITS BY INSTITUTION OFFICIALS December 4, 1915. the Comptroller of the Currency stated that Congress should enact a law preventing bankers from lending money to themselves, or for their personal benefit. That officer, in commenting on the closing of the doors of the First National Bank of New Richmond, O., on November 20, made the following statement:

The failure of this bank was due to bad banking. At the time of its suspension the bank was lending to its president and cashier and to enterprises directly or indirectly controlled by them, an amount exceeding its total deposits.

This emphasizes the importance of obtaining legislation which will prevent bank officers from lending to themselves, or for their personal benefit, the funds of depositors committed to their care.

NEW TREASURY RULE CHANGING METHODS OF RETIRING NATIONAL BANK CIRCULATION AND OF REFUNDING

GOVERNMENT BONDS

December 11, 1915, new regulations for a method of retiring National bank circulation and of refunding United

States two per cent. bonds, as provided for by the Federal Reserve Bank Act, received the approval of the Secretary of the Treasury. A statement from the Treasury Department on the subject is in part as follows:

On and after December 23, 1915, when section 18 becomes effective, any National bank may submit to the Treasurer of the United States application to sell at par and accrued interest any bonds securing circulation which the bank desires to retire. On March 31, 1916, and quarterly thereafter, the Treasurer of the United States will submit to the Federal Reserve Board a list of all applications to retire circulation that have been received at least ten days before such date. The board will pass upon such applications and will advise the treasurer of any bonds allotted to the federal reserve banks for purchase.

The treasurer will then call on the federal reserve banks required to purchase the bonds to deposit lawful money therefor, and after receipt of such deposits the treasurer will cover into the Treasury such sums as may be necessary to redeem the notes to be retired, will remit the balance to the banks selling the bonds, and transfer title of the bonds to the federal reserve bank acquiring them.

Federal reserve banks owning two per cent. consols of 1930 or two per cent. Panama Canal bonds, against which no circulation is outstanding, may apply for the conversion of such bonds into one-year three per cent. notes or thirty-year three per cent. bonds. Such applications may be submitted at any time, but conversions will be made quarterly on the first day of January, April, July and October, which are dividend dates for the consols of 1930.

The notes will be termed "one-year Treasury notes"; they will be payable one year from date of issue, and a bank applying therefor must execute an obligation to purchase at recurring maturities for thirty years similar notes in like amounts. Subsequently banks may exchange such notes for three per cent. bonds.

These notes will be issued in denom

inations of $1,000, $10,000 and $50,000. The bonds will be termed "three per cent. conversion bonds," and will be payable thirty years from January 1 of the year of issue; they will be issued in denominations of $100, $1,000. $5,000 and $10,000.

Both notes and bonds will be issued in registered and coupon form; they will bear interest at three per cent., payable quarterly on the first day of January, April, July and October; they will be payable, principal and interest, in gold coin of the present standard value, and will be exempt from all taxation. They will not be acceptable as security for circulation.

SECTION 18 OF THE FEDERAL ACT EFFECTIVE DECEMBER 31, 1915, AND THE SECRETARY OF THE TREASURY'S NEW PLAN FOR RETIRING NATIONAL BANK

CIRCULATION

December 18, 1915, the Secretary of the Treasury announced that he had established a method of retiring the old National bank currency and of refunding the United States two per cent. bonds as prescribed by the Federal Reserve Act.

The volume of currency to be retired by the regulations formulated for putting the provision of the reserve act into operation is approximately $730,000,000. The total National bank circulation outstanding is $771,000,000, but a considerable part of this is secured by State and municipal bonds instead of the Government 2 per cents. which may be refunded.

The banking sentiment of the country for some time has been in favor of the early retirement of as much of the National circulation as practicable. Bankers have pointed out repeatedly that the supply of currency now at hand consists of all the old National bank circulation as well as the considerable volume of federal reserve notes which have been issued since the new currency system was put into operation.

The view has been expressed frequently that the country is heavily over-supplied with currency as the result of the absence of some provision for the retirement of the National bank circulation. Instead of a flexible volume of currency, enlarging or diminishing in response to the seasonal and other needs of the business community, there has existed a non-flexible volume which many bankers regarded at certain periods as more than sufficient for the needs of business. Here is a statement issued by the secretary outlining the regulations establishing the method of retiring National bank circulation and of refunding United States two per