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c 0 X-6056 P Y EDWARD J. SMITH Attorney at Law Nashville, Tenn. i; ^ /]wc ® Federal Reserve Board, Washington, D.C. Mr. Walter Wyatt, General Counsel. My dear Mr. Wyatt: After two oral arguments in the Court of Appeals of the case of L and N Railroad Company v. Federal Reserve Bank of Atlanta (Nashv i l l e Branch) and American National Bank of N a s h v i l l e , Tennessee, that Court on May 21, 1928 entered an order transferring the cast to the Supreme Court of Tennessee on the ground that a "constitu-r t i o n a l question" was involved, and necessary to the decision of the case. The a l l e g e d 11 c o n s t i t u t i o n a l question" , as s t a t e d by the Court of Appeals, was the power of Congress to delegate to the Federal Reserve Board the authority to promulgate r u l e s and regulat i o n s governing Federal reserve banks when acting as clearing houses; and, secondly, whether the Federal Reserve Act, as a matter of construction, conferred on the Federal Reserve Board the authority to issue a regulation of the tenor and character of Regulation J , Series of 1924. The second question, standing alone, and involving merely a matter of statutory construction, would not have defeated the j u r i s d i c t i o n o f the Court of Appeals, but as that Court, under the Act creating i t , Chapter 100, Acts of 1925, has no j u r i s d i c t i o n of cases involving " c o n s t i t u t i o n a l questions", the exclusive j u r i s d i c t i o n concerning which i s vested in the Supreme Court of Tennessee, the Court of .Appeals, s t a t i n g that a " c o n s t i t u t i o n a l question" was raised by the challenged power of Congress to confer upon executive or administrative boards or commissions authority by regulations to change the general commercial law of a s t a t e , transferred the case to the Supreme Court of Tennessee. In the Supreme Court the whole case w i l l be presented and determined, u n l e s s indeed that Court should conclude that the challenged power of Congress presents merely a f r i v o l o u s or colorable Federal question in which event i t w i l l remand the case to the Court of Appeals for determination. As the case, however, w i l l undoubtedly be heard by the Supreme Court of Tennessee on the m e r i t s , and regardless of the decision of the Court of Appeals, Mr. Vertrees and I have concluded not to make a motion in the Supreme Court to remand for the reason that i f the motion was sustained the case would be remanded to the Court of Appeals, and three or four months elapse before i t would be decided by that Court, when i t would go to the Supreme Court of Tennessee for f i n a l determination. With a view Of; saving time, we have, therefore, decided not to make a formal motion to r e mand in the Supreme Court. I 480 X-6056 We have prepared a supplemental brief which you w i l l understand w i l l he used not as a substitute, hut in conjunction with our main printed brief f i l e d in the Court of Appeals when the case i s argued before the Supreme Court of Tennessee on June 15, 1928. I enclose herewith a draft of this proposed supplemental brief and Invite any suggestions or criticisms which you may f e e l impelled to make. I w i l l ask you to inform me of any suggestions or criticisms on or before next Wednesday, as this supplemental brief w i l l have to be put in the printeir1 e hands on that date in order that printed copies may be f i l e d in the. Supreme Court of Tennessee in accordance with the rules of that Court before June 15, 1928, on which day oral argument w i l l be heard, I have just received your l e t t e r of May twenty-eighth, and agree with you, that counsel for Federal reserve banks throughout the United States should, whenever the opportunity presents i t s e l f , i n s i s t that regulations of the Federal Reserve Board have the force and e f f e c t of laws. You w i l l doubtless r e c a l l that in the pending case, Mr. Vertrees and I argued and c i t e d authorities in support of this proposition, although as a matter of precaution we pleaded and pro •ved Regulation J as a defence in the pending case. , . , . I thank you for c a l l i n g my attention to the excerpt .from Federal Statutes Annotated dealing with this point. Please do not hesitate f r e e l y to c r i t i c i z e the proposed supple* mental brief in any way that may occur to you, for I wish you to be assured i * advance that your co-operation, advise and counsel have always been and always w i l l Be deeply appreciated by me. With best regards, I am, Sincerely yours, E. J. Smith (signed) May 30, 1928.
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