The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1866-05-15
National Banks as Government Deposit
tories.


AS greatly affecting the public interest, we pub
llsh, and will continue to do 30, whatever may be
interesting in regard to tho national bank
management OF the country. Tho following
article, from the Baltimore Sun, journal recog.
nized throughout the land q most moderate
and truthful conservative commercial paper, we
subjoin, ON "National Banks as Government De.
positories'' "Tho resolution adopted by the
House Of Representatives on Tuesday, directing
the Committee on Banking and Currency to in.
quire into the circumstances Of the failure of the
Merchants National Bank of Washington, and
other national banks, recently, also directs the
Committee to consider as to what further legis.
lation is necessary in relation to that class oi
banks, used as Government repositories, to pro.
tect the public interests. Whether this shall re:
suit in that most desirable thing, change of the
law 30 as to break up The practice Of making
national banks the repositories Of the public
funds, remains to be seen. We are glad to see,
however, very general expression in intelli.
gent journals-those capable Of considering
financial and other practical questions without
reference to stupid partisanship-in favor oi
suoh an amendment OF the law. To confiue the
deposit OF Government moneys, whether passed
to the credit OF disbursing officers or not, to the
Sub-Treasuries, custom houses, &o., in the cities
seems the safest and most legitimate mode. Why
the banks should be selected to take charge OF
the public funds, when there are Government in
stitutions in all the leading cities adapted to the
purpose, it would be difficult to divine-unless it
be with the view of fostering speculation and
stimulating prices, by furnishing the banks with
additional large capital to loan to tho various
classes OF operators for rise.' But it appears
that under this system the Government has
actually been made to pay interest on its own
money. The Philadelphia Ledger relates, on good
authority, that this curious feature in modern
finance was Worked in this way: A national bank
in New York city, the name OF which could be
given, got itself designated depository and
procured a deposit of 100000 of public money.
The transfer was made by chock on the
United States Assistant Treasurer at New York.
The check was then deposited by tho bank as
it's own money, and to it's own credit, in the
Treasury Of the United States, at per centum
interest-and thus, instead OF the bank paying in
terest to the Government, the Government was
made to pay interest to its oDn debtor thebank This
financial achievement is peculiar to the 'desgna-
ted depository system. How often the dodge
was resorted to, it will be for the House Commit
tee to inquire into and expose, as we'll as to what
extent the Government money has been used
through these institutiobs, all over the country,
for speoulatons in the .ries of le in fancy
stocks, and even in elevating the gold premium by
furnishing funds to gamblers with which to buy
and carry gold. That able Republican paper, the
New York Post, is among those that desire the
immediate action of Congress on the subject. 1t
says that il the banks established under the au-
thority OF the Government cannot be trusted with
money on deposit, the oficers Of the Government
should be put under rigorous prohibition against
making any deposits of the public money with
these institutions. It seems, from this example of
the Merchants National Bank, that they are not
safe custodians of the public funds 1t is fortunate
that they are not needed for this purpose In the
vaults of the Assistant Treasurers OF tho United
States these funds may be placed in perfect
safety"