Felix Frankfurter

“ So far as the powers of a national bank to pledge its assets are concerned, the form which Government takes-whether it appears as the Secretary of the Treasury, the Secretary of War, or the Inland Waterways Corporation-is wholly immaterial. The motives which lead Government to clothe its activities in corporate form are entirely unrelated to the problem of safeguarding governmental deposits, and therefore irrelevant to the issue of ultra vires. ”

“ Congress has necessarily been concerned from the beginning to provide appropriate safeguards for government funds. One of the motives in the establishment of the first Bank of the United States was its availability as a safe depositary for such funds. They were kept there until the expiration of that Bank's charter in 1811. Thereafter and until the second Bank of the United States was chartered, government monies were kept in state banks. These deposits were without security, and as a consequence severe losses followed the financial dislocation which came with the War of 1812. ”

“ By a series of specific statutory commands, Congress has recognized the power of national banks to give security for deposits of a governmental nature by laying upon various agencies, charged with the custoody of such funds, a duty to exact collateral. ”

“ In the Sneeden case the banking standards relied upon in the Pottorff case were applied likewise to deny to national banks power to pledge their assets as security for deposits by state and local governmental agencies except where permission is given by the Act of June 25, 1930, 46 Stat. 809, 12 U.S.C. § 90, 12 U.S.C.A. § 90. [2]
But the function of national banks as depositaries of federal funds was not before the Court in the Pottorff and Sneeden cases, and the power of the banks in relation to such funds could not have been decided there. That power is the exact issue here. ”

“ The true nature of these modern devices for carrying out governmental functions is recognized in other legal relations when realities become decisive. Compare Clallam County v. United States, 263 U.S. 341, 44 S.Ct. ”