delivered the opinion of the Court..
The Act of June 25, 1930, e. 604, 46 Stat. 809, amends § 45 of the National Bank Act of 1864 1 by adding thereto the following:
“Any association may, upon the deposit with it of public money, of a State or any political subdivision thereof, give security for the safe-keeping and prompt payment of the money so deposited, of the same kind as is authorized by the law of the State in which such association is located in the case of other banking institutions in the State."
The controlling question is whether Illinois has con- - ferred upon banks оrganized under , its laws power to pledge assets as security for deposits of public moneys of. political' subdivisions of the State.
In 1931, the city of Marion, Illinois, was operating under the “ Commission Form of Government." • Cahill’s 1931 Rev. Stat., Chap. 24. Pars. 323-384. ' That statute *267 required the treasurer of a city to give a bond; and to “ make his daily deposits of such sums of money as shall be received by him from all sources of revenue whatsoever, to his credit, as treasurer of said city ... in one or more banks to be selected by the president of said council, the commissioner of accounts and finance, and the treasurer of such city ... or any two of them, and any suсh bank before any such deposit is made therein . , . shall also execute a good and sufficient bond with sureties to be approved by the president of said council and conditioned that such bank will safely keep and account for and pay over said money . . .” (Par. 374.)
Carroll having been appointed treasurer of Marion, applied to the Fidelity and Casualty Company of New York to become surety on his official bond. Although Marion has a population of 9,000, it was then without a bank. The Fidelity Company agreed to become surety on Carroll's bond provided he would get elsewhere a bank which would give satisfactory cоllateral security for the repayment of his deposits of the public moneys. The City National Bank of Herrin agreed to do this. Thereafter, it delivered to the Continental Illinois National Bank and Trust Company of Chicago, as escrow agent, negotiable bonds of the par'value of $23,000, under an agreement so to secure the City’s- deposit; the Fidelity Company executed Carroll’s official bond; and he made his initial depоsit in the Herrin bank of the City’s moneys. That bank was then solvent. On October 31, 1931, it failed and a receiver was appointed. At the time of the failure the City’s deposit was $16,430.00.
Ben Sneeden, the receiver, brought, in the federal court for eastern Illinois, this suit against the City, its treasurer, •the surety and the escrow agent. Setting forth the above. facts, he prayed that the pledge be declared ultra vires and void; that the bonds be delivered to him asi receiver; and that, meanwhile, the defendants be'enjoined from dis *268 .posing of them. The District Court dismissed the bill. 58 F. (2d) 341. Its decree was reversed by the Circuit Court of Appeals, one judge dissenting. 64 F. (2d) 721. This Court granted certiorari.
The petitioners contend that the pledge is valid because the Act of 1864, as originally enacted, conferred upon national banks, as a necessary incident of the business of deposit banking, the power to pledge assets to secure deposits; and that the amendment of June 25, 1930, did not limit the power so originally conferred. They contend further that even if the 1930 amendment be construed as denying to a national bank power to makе such a pledge unless it is located in a State which grants the power to its state banks, the pledge here challenged is valid, because in Illinois, state banks- have the power to pledge assets as seсurity for deposits of public moneys of any political subdivision of the state. The petitioners contend also that even if the pledge was without authority in law, the bill was properly, dismissed by the District Court, because the bank could not have required return of the bonds without repaying the deposit and that it would be inequitable to permit the receiver to do so. We think'these contentions are unsound.
First. For the reasons stated in Texas & Pacific Ry. Co. v. Pottorff, decided this day, ante, p. 245, we are of opinion that the Act of 1864 did not confer the power to pledge assets to secure any public deposits except those made under § 45 by the Secretary of the Treasury of the United States. The power confеrred by each later act, except that of 1930, was limited to securing specific federal funds. 2 A national bank could not legally pledge assets • to secure fuhds of a State, or of a political subdivision thеreof,, prior to the 1930 amendment; and since then it *269 can do so legally only if it is located in a State in which state banks are so authorized. In some States national banks' had, prior to the 1930 amendment, frequently plеdged assets to secure .public deposits of the State or of a political subdivision thereof; comptrollers of the currency knew that this was being done; and they assumed that the banks had the power so to do. But the assumption was erroneous. The contention that such power is generally necessary in the business of deposit banking has not been sustained.
Second.
Banks organized under the laws of Illinois do not appear tо possess the power of pledging assets to secure the deposit of public moneys of a political subdivision of the State. Illinois corporations have only such powers as are conferred by statute either expressly or by implication; and only those powers are conferred by implication which are reasonably necessary to carry out the powers expressly granted,
People
v.
Chicago Gas Trust Co.,
Ward
v.
Johnson,
An authoritative determination of the questiоn whether Illinois banks have power to pledge assets to secure the deposit of public moneys of a political subdivision of the State can be. given only by its highest court. The District Court discussed, but did not decide, thаt question. Its decision dismissing the bill was rested on the ground that the National Bank Act as enacted in Í864 had conferred the general power to pledge assets to secure deposits; and that the power so granted had not been lessened by the later legislation. The majority of the Circuit Court of Appeals being of opinion that national banks lacked the power to pledge assets to secure deposits (еxcept so far as conferred by the 1930 amendment) necessarily passed upon the applicable Illinois law. After careful consideration, it reached the conclusion that Illinois hadi not conferred upon its banks the power to pledge assets to secure deposits of. political subdivisions of the State. Its reasons are set forth fully and persuasively; and the decisions of the courts of other States *272 involving similar questions are fully reviewed. We .cannot say that the Circuit Court erred in the conclusion reached.
Third. Since the Herrin bank was without power to make the pledge of bonds here in question, its receiver is entitled to recover them unconditionally in order that they may be administered for the benefit of the general creditors of the bank. See Texas & Pacific Ry. Co. v. Pottorff, ante, p. 245.
Affirmed.
Notes
Act of June 3,1864, c. 106, § 8,13 Stat. 101; R.S. 5336; 12 U.S.C. § 24, Seventh.
See Texas & Pacific Ry. v. Pottorff, ante, p. 245, note 11.
In the Banking Act of 1919, Cahill's 1931 Ill. Rev. Stats., c. 16a, Par. 1, which, reenacting the law of 1887, provides for the organization of banks “for the purpose of . . . deposit” there is complete sEenee on this subject. The only references in any IEinois statute concerning the pledge of assets to secure a deposit are the following:
(a) Section 10 of the State Depositary Act of 1919 (CahiE’s 1931 IE. Rev. Stat., c. 130, Par. 29) provides: “No moneys in the State Treasury shaE be deposited in any bank approved as a depositary *270 under the terms of this Act until such bank shall have deposited security with the State Treasurer equal in market value- to the amount of moneys deposited.
(b)p Section 11 of the Banking Act аs amended in 1929 (Cahill’s 1931 111. Rev. Stat., c. 16a, par. 11) provides that a receiver of a closed bank:
“ Shall deposit daily all moneys collected by him in any state or national bank selected by the auditor, who shall requirе of such depository satisfactory securities, or satisfactory surety bond for the safe keeping and prompt payment of the.money so deposited.”
Courts of other States have referred to it as аuthority for the proposition that banks have the power to pledge assets to secure deposits. See
Williams
v.
Earhart,
The Auditor of Public Accounts in his annual statement on the condition of state banks (p. 42) gives (Dec. 31, 1932) 1,866 аs the aggregate number of the banks existing on Dec. 6, 1888 and organized since. Of these 26 had charters granted prior to Dec. 6, 1888; and 1,840 were organized thereafter under the general law. The number of banks in operation Dec. 31, 1932 was 742. The number then in receivership was 444. Between Dec. 31, 1932 and March 1, 1933, 32 more state banks failed. Federal Reserve Bulletin, 1933, pp. 105, 201.