Constitutional Whig. [volume] (Richmond, Va.) 1824-1832, 1824-06-04

Richmond, and in the of South Carolina and
Georgia, Except the City Bank of Baltimore) and
of those specie paying banks III the state in which
the Land Office is situated. This instruction." il
is added, supercedes those which have heretofore
been given the subject, except IN so far as they
prohibit the receipt of the paper of any bank which
does discharge its notes, on demand IN specie
aud that prohibition must, in every case, be rigidy
| adhered to-"
Among the banks with which these negotiations
were made the attention of the committee was call
| cd, particularly, the Farmers and Mechanics
| Bank of Chilicothe, AMI the branch OF the State
Bank of Kentucky, at Louisville, as forming the
subject of charge that does not apply TO the others.
In tho several places where these banks stu
| atcd the Bank of the United States had Offices of
discount aud dcpositc, and tho law Incorporating
that institutions as has been before observed, cree
ates an obligation tho Treasury of the U. States
| to them places of deposits in preference to
any other banks, unless the Secretary shall, for spe-
cial reasons, otherwise direct; and, in that case,
such shall be laid before Congress at its then,
|! or next, Session The charge is, that such COM
n,unicat made TO Congress. This omission
is acknowledged Ivy the Secretary, who says it was
owing to inadvcrcncc, and that the inattcntiou to
| the provision of the law umimportant, inasmnch
as the provision was intended obviously, for the be-
ncfit of the bank and the bank had full notice.
The no,orioy of the fact is also relied on to show
| that improper conduct, desire to conceal il,
produced the omission.
| The committee sees no reason to doubt this
statement, or to attribute any improper motive TO
the Secretary, i'll this nattcn,iom the directions Of
| the
The charges relative to the Bank of Missouri arc,
! in substance,
| That this bank was unworthy of credit at
| the time the dcpositcs of public moneys were
suffered to accumulate i'll it to Il large and impro-
per amount:
That the permanent depositc allowed it was lille
gal, and unreasonaby large:
! those nj ifS fair
which the Secretary had himself considered essen
tia were not cxacted:
| Aud, finally, that, in payment of its debt large
amount of uncurrent notes was received, some of
them not worth twenty-five cents in the dollar con-
trary to the positive injuncons of the resolution
pf 1916.
The committee thinks 1t very probable that the
Bank of Missouri did make an improper, perhaps
an excessive, issue OF its paper although the mode
adopted in the address, of estimating that excess
appears not altogether correct as it omts to mem
ton the permanent dcposite OF the government in
calculating the fund on which the emission might he
made. If the capital of the hank We're, rs is sta
ted, S2lO000, and its permanent dcposte from 90
vcrnment Si50,OoO, supposng it to have no other
dcposites, discount to the extent Of SiJ0000
would not have been alarmngly excessive, suppos-
ing tho loans 10 have been limited to safe hands and
that punctuality of payment might have been cx-
p'ctcd. 1t s probable that failure in this latter
respect the immediate CO use of the bank s,s-
pending its payments.
The sum of S72G, 900, which appears, at one time
to have been in this bank, certainly very large
sum to have been suffered TO remain in country
bank; but whether 1t was greater accumulation
than ought to have been allowed, is il question that
depends on many considerations, chiefly on that of
sodity of the institution, which itself again de-
pended on the sovency of its debtors. OF this the
committee have other evidence than that arisiug
from the report OF the committee of tn Legislature
of Missouri, appointed examine the affairs of the
han E,,,k, Anrl0 HAT 81, Il
security, well as those secured by mortgage are
safe. If this well founded, the bank. even at
the time 1t stopped payment had, in those items "a
lone, more than enough to pay all i; owed.
What information. to put the Secretary on his
guard, would have been derived from the month";
y returns, the committee cannot determine. They
appear TO auc been furnished only up TO the LIST of
February, 1920 Nor has the Committee observed
any demand made by the Secretary for a compli-
ance with this stipuaton at any time between that
date and tile time the bank stopped payment
Whether, however, if it had been deman I'd and
complied with, any different result favorable to the
United States, would have been produced, it Gems
impossible TO determine, because, judging from the
last and most untavorable return made immediately
previous to the stoppage Of the hank, nothing in
those returns would have appeared to indicate any
danger
j more important part of the charge is, that the
Secretary received rom .s yan, ~. pa1 ~. me-,
of its debt, large Of uncurrent notes, con-
trary to law.
BY the first arrangement made with the bank
which has been already stated, it was not RESPONSE
BILE, as far the committee can perceive, for the
:olvency OF the banks, the notes of which might
have been deposited in it by the public recevers-
When the new contract was made in August, 1919,
1t did not form any part of that contract as it did
with some Of those of the other banks that the bills
already on hand should be at once passed to the
credit OF the Treasury cash, as may be seen by
copy of the contract annexed to this report ma rk
ed Il. SO that the important question is, whether
those notes received before or after the 9th Of
} August, 1919, the day which the bank assented
to the new contract. il before, then they are re.
ceived on account, and the risk of the govern.
} ment; it after at the risk of the bank.
The committee think there were sufficient res sons
to justify the Secretary in believing them TO ba
been received before the 9th of August because bv
the letter of the bank, of that date it appears that
much larger sum in notes essentially Of the same
description, was in possession of the bank and an
offer is therein made transfer them to various o.
ther banks, to the order of the Treasury. And by
the statement marked E. annexed to the address of
Mr. Edwards il appears that, early as the 9th of
September, 1919, much larger sum- in notes of the
description of those thus offered by the bank had
actually been received account of the Treasury
from the several Receivers, and were then on hand
On this point the committee also refer to the depos
ton of Thomas F. Riddick, hereunto annexed.
marked r.
The committee think it proper TO add that, of the
whole received by the Treasury in these no,es
from the Bank of Missouri, sum of about tyyen
W thousand dollars only appears be unpaid and
of this it is stated by the Treasure thoro
are hopes that considerable part will bs 60.
cured
very large part Of the address is occun;cd viii,
observations on the transactions between the Trea
sury and the Bank of Edwardsve. Thie hs,L
was made depository of public money! AT the 90