Baltimore daily commercial. [volume] (Baltimore, Md.) 1865-1867, 1866-06-20
Ii:aerestiFag Correspondence 10 Bankers.
Inc following correspondence will Prove of nterest
to bankers throughout the country:
NATIONAL MECHANICS AND FAkNEps' P.NEl
AIRL,N Inn, I

LHe toiinWlHg spGndcnce il! prOvc of
10 baqEerS throughout the country:
NATIONAL MECHANICS AND FARMERS BANKl
tor II - u. ALBANY, juno II, 1856.
Ny Dear Str-Ihe former Commissioners If T. for
MAJ revenue decided that deposits growing cut OF
corrections Tor other baaks and remitted for at Snort
dates We're not taxable. Your decision tb0uah COM
prehensive still leaves the question open for
To interpret, You require the ta1 on COLLECTIONS
made Tor other banks and, in fact. on all dcscrip-
nonE OF deposits which may be used by the bank -
our interior banks collect fer city banks and remit
by checks on New York, weekly semi-Tuonthly and
monthly, as the arrangements may he nj mar
meekly remittalccs average 81 days; semi-monthIy
Iemittan0es average u Gays; monthly remttanccs
averhse L z days; Deposits which remain in inte-
rior banks through collections in isce aneous cur
rency only 50 and ~ days, and are then RENTED
tor 5y cFeck on city banks. cannot, think be safely
post OF 5 days aud therefore prefer to know and
De governed by your views. As an experienced
country banker. you can readily decide this dues-
Of 20 days ~
think we may fairly claim that in case Of doubt
we should have the benefit Of it, This equitable in
are so overtaxed beyond all other property as to
seriously threaten their destruction The yearly taxes
Oh enls bank Government, State and municipal. are
over ten per cent on our capital bis will excuse US
Ior past ana future conflicts for rights which cannot
De YIELDED without surrender of cur existence.
am therefore lnd uced to bring before you another
question for your decision. Can q deposit be taxed
more than once? For instance, the Mohawk Valley
bank has DEPOSITS amounting to $l00,OO0 upon which
they pay the Government tax. They remt S25 600 of
said deposits; and can the same be taxed a second
time in our h2nds? We remit it. to our credit, to a
bank in y ew ork, and if this duplicate taxation -
claimed there is no limit 10 its multipIication and
consequent Injustice and oppression.
suggested these points. and some other which the
GoYernment has since yielded to the present Secre-
tary OF the Treasury when he Comptroller of the
Currency and he wrote me that my suggestions had
great weight, and that he would peak to tho Con-
missioner of Internal Revenue on the subject, The
sacrifices which the condition of our country then re-
qured of us no longer demand our unyieIdng ocoI1i
| a. hDl ar-IIr roI Co.,
and amicable adjustment of these questions
nave the honor TO be, dear sir, yours
TH0s. W. OLCoTT. President
REPLY or TREASURER SPINNER.
TREASURY OF THE UNITED STATES
DIVISION OF NATIONAL BANKS,
WASHINGTON, June Is, 1866.
Sir-I have received yours of the Ilth instant the
contents of which note.
You quote the words of the return: COLLECTIONS
made Tor other banks and in fact all descriptions of
deposits may be used by the bank and refer to col
lectOnS made by country banks for city banks for
which payment is made at stated periods which col
iectlOns you think would not properly come under
the head OF deposits used by the bank
1n the semi annual return, after enumeratinp tho
different classes of deposits that have occurred to
as likely to be made with bank the words ''and in
by the bank, have been inserted to cover any de-
posts that may not have been enumerated and not
us qualification Of the preceding classes.
L think deposits arising from collections are as
clearly SUBJECT 10 duty as class of deposits The
collecting bank has the of the money from time
OF collection until it is paid; it goes into general ac-
counts with other funds of the bank and mav he
used as well. The fact that remittsnce is made at
stated periods does not operate against this view 1t
may even be an advantage to bank to know eX-
acty how long collection or deposit may remain
with it. If the collecting bank RENTS at stated
periods at par las stated or without charge it would
seem that it was an Acknowledgement that benefit
was derived by il from the collection
In regard to the question, cen a deposit be taxed
pore pore than once instancng the Mohawk Valley
Bank, as paying duty on 100000 deposits S25OOO of
which have been deposited with you by that bank
upon upon which amount mo you pay duty atb9ugh
where is subject to duty. 1t is clear that the Mo-
hawk Valley Bank has received the $lOO,COO on de-
post, the whole OF which is available TO it. although
portion of it may have been placed with Won ms a
fund against which it Can draw upon which if Dro-
ba6y receives interest although that would not be
mate erla TO tho question. 1t is not less clear that
you have received S2500O on deposit which you have
transferred TO the New York bank with the same
view, and that the New York bank has the S25 100
on deposit, which 1t may as it may use any de-
post, say of individuals. The question would not
then be. what use does bank make of its deposits
but what deposits has it on hand?
L know that the present duty and taxes on banks
are onerous and burdensome but yet so long as the
duty with the collection of which am entrusted is
lad upon them It does not seem a sufficient reason
why should authorize departure from what seems
to be the spirit clear intent, and meaning of the law
which might thus be so perverted rs to fail to answer
the purpose designed. bank should not be per-
mtted for its own benefit to go behind its own re-
cords and books and to eliminate certain amounts
which 1t judges not profitable thus opening door
fraud and perjury. Of course there would be no
suspicion OF evasion by a bank of character and
standlng IKE your own, but with some banks 1t is
undoubtedly best to leave. if possible, nothing un-
defined
A remedy would be for banks to decline to receive
deposits on such terms would not allow a profit to
them above the duty and other expenses; but while
competition among them for business is so great it
does not seem probable that this rule would generally
prevail
The banks in New York and other cities were per-
mltted, upon representations made by them to omit
from their deposits of the day such checks were
deposited on that day, but remained uncolected and
against which no checks were made or rather maid
but no claim has been made that any collections
should DO omitted from deposits after the money has
been collected.
notice a proposition before Congress to reduce
materially the duty upon banks which or something
similar 10 1t hope TO see become law 1t seems
necessary in the event that hurdensome State tax
upon the banks shall be insisted upon, that Congress
should to certain extent remit the duty to the Gov
ernment. +. i. SPINNER
Treasurer, United States
Hon. W. Olcott, President National Mechanics and
Farmers Bank, Albany, New York.