The Nashville daily union. [volume] (Nashville, Tenn.) 1862-1866, 1865-12-27

"Undivided Profits,
The following letter from the Treas
urer OF the United States contains an
important decision relative to the ''un-
divided profits" Of national banks
TREASURY or THE UNITED STATES. :
WASHINGTON, Dec 81, 1865 !
GEETLTNEN Your communication Of
the 18th instant was duly received. As
suggested by you, / have had q full
conversation with the Commissioner
Of Internal Revenue in regard 70 the
points raised therein, and the delay in
the reply has been Occssioned by the
fact that have not been able 70 con-
suit thst officer at an earlier time
Under the provisions Of the forty
irst section of the National Currency
act, ] have deemed it my duty TO re
luire 10 be included among deposits
subject 10 duty the undivided profits
Of bank. Il has been always clear TO
me that profits should pay duty I'M
der this section The question might
be raised, should they pay duty as de
pOsits or ss capitall II appearing TO
me that they were more in the nature
Of deposit than Of capital, have di-
rected that they be so classed The
duty on deposits and on capital is fixed
al the same rate, so that, it being de
cided that profits we're TO pay duty
the duty under either head would be
the same in amount, with the excep-
ton of the following: A few banks
may possibly own United States bonds
in excess of their capital In case
profits were classed as capital, they
would be entitled 10 deduct such bonds
to a greater extent than they now do
with profits classed as deposits 1t is
not probable however, that there are
many banks that would be the gamers
by the different construction
The Commissioner Of Internal Reve-
nue. CONSTITUTES the law under which he
auts 10 require him TO obtain payment
from all banks, National OF State, of
the taxes on dividend and surplus, and
also 10 exact the license fees required
by the same act While il ID true that
the national currency act, in providing
for the semi annual duty, specifies that
this duty shall be in lieu Of all ex-
isting taxes, il so happens that this
provision is not applicable TO the Inter
nal Revenue act, which became law
subsequent TO the passage OF the ma
tionsl currency act
While the examination given 10 the
matter has made it evident that the
ITEM Of surplus is now liable TO pay tax
or duty 10 an extent greater than l had
supposed, IL has also resulted IN the
conviction that no change in the pres
ent requirements could be made that
would meet your views consistently
with the construction given by each
officer TO the law under which lie acts
desire here TO state, however, what
I have heretofore, on several occasions,
had opportunity 20 say, both verbally
and by written communications, that
the surplus fund of a bank, TO the ex-
tent say Of twenty per cent OF the cap
ital, should, under certain clreum-
stances. be exempt from all duty.
This view. ] am pleased 10 know,
has the concurrence Of the SecTe-
tary OF the Treasury, Of the Com
missioner Of Internal Revenue, OF
the COMPTROLLER of the currency,
aud of gentlemen IN Congress
who have given the subject their al
tention. 1t is proposed, therefore, by
TIE Commissioner Of Internal Revenue,
and by myself that at some early period
in the season a meeting be held q the
officers named in connection with mem
bers Of the Committee of Ways and
Means, and of the Committee on Bank
ing and Currency of the House Of Rep
resentatives, before which committee
any matter relating TO banks will pro
badly come for consideration; and It IS
most likely that the result Of such
consultation will be the recommends
ton TO. and adoption by, Congress Of a
provision exempting from duty or tax
surplus funds to the extent named, or
AT least 10 such an extent as Will great
ly strengthen the banks 10y encouraging
the accumulation and retention by
them Of SURPRISES.
la regard to the matter OF daily set
Elements" / can only say that the pres
ent requirements were adopted by the
Internal Revenue Office, and by tins
Office, after a very full consideration
given TO the subject, and that the
method Of making returns Of deposit
required by both Offices that Is the
balance on hand when the books OF
the bank are closed for the day, has
hean deemed equitable and Just
Very respectfully,
r. + SPINNER,
Treasurer United States