New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1872-04-12
Bill Relating to National Bank Deposits

House Of Representatives last Thursday
and referred to the Committee on Way
and Means. 1t embraces the views of til,
Secretary of the Treasury on the subject
which he explained before the committe,
yesterday:
Be it enacted, etc., That any Natioua
Banking Association which will have de
posted bonds with the Treasury of the
United States for the security of its circula
ton, IN accordance with the provisions Of
an act entitled an act to provide national
currency, secured by pledge of United
iatlon and redemption thereof, approved
the third OF January, 1864, and of the sew.
erai acts amendatOry thereof, may, on or
before the first day of January, 1873, in
lieu OF the bonds so deposited, deposit
bonds authorized by act approved four
teenth of July, 1870, entitled an act author
izing the refunding of the national debt in
equal amounts of each of the several classes
OF bonds authorized by said act provided,
however, that any bank which shall have
deposited five per cent bonds with the
Treasurer Of the United States previous to
the passage Of this act, may subscribe for
and deposit an equal amount each Of said
several classes of bonds for any sum addi-
tiOnal which may be required as security
for the circulation of such bank.
Sec. 9. That if any banking association
or associations shall neglect to deposit
bonds with the Treasurer of the United
States, agreeably to the first section of this
act, other banking associations may be Or
| gained in the State where any banking as
ISOLATION or associations which shall have
so neglected to make deposit of bonds
may be located, and such new associations
shall have all the powers and privileges,
| and be subject to all the duties and liabili-
ties of other banking associations organized
| under the act aforesaid; and it shall be the
duty Of the Controller of Currency, under
regulations to be prescribed by the Secre-
tary OF the Treasury. to call in the circula-
ton OF such banking associations so neglect
ing to deposit bonds as provided in the first
section Of this act; and the circulation
SO called in shall, on presentation
to the bank issuing the same, be
redeemed and forthwith returned to
the Controller of Currency to be destroyed,
as provided in section twenty-tour of the
national currency act, and if any bank
shall fail to return said circulating notes for
destruction in thirty days after they shall
have been redeemed, the bank so in de-
fault shall forfeit as penalty therefor a
sum equal to ten per cent on the amount of
notes redeemed, which penalty shall be re.
tanned by the Treasurer out Of any interest
due or to become due on the bonds held by
him as security of the notes of said bank;
and the circulation SO called in shall be
awarded to such new banking association
in conformity with the existing laws.
Sec. 3. That the Secretary Of the Treas
ury be and he is hereby authorized to pro-
vide for the registering and transfer of
registered bonds issued under the act ap-
proved July IA, 1870, entitled an act to au-
thorize the refunding of the national debt
in London, England, and for the payment
in that city Of the interest on the bonds
issued under said act.
SEC. A. That section three Of an act en-
titled an act to authorize the refunding of
the national debt, approved July IA, 1870.
be amended by striking out all after the en-
acting clause, and inserting in lieu thereof
the following: That the payment of any
bonds heretofore authorized after the ex.
piration of said several terms of ten, fifteen
or thirty years shall be made in amounts to
be determined from time to time BY the
Secretary of the Treasury, at his discretion.
the bonds so paid to be distinguished and
described by dates and numbers, and of the
time Of which the intended payment or re-
demption the Secretary of the Treasury
should give public notice, and interest on
the particular bonds so selected at any
time to be paid shall cease at the expiration
of three months from the date of such |
notice.
The Chicago Tribune says in reference to
this bill
Secretary Boutwell, has proposed a mea-
sure which would strike the country with |
alarm were it not the repetition of an old |
demand on his part, to which Congress has |
once refused its assent.
The national banks of the United States |
own, and have deposited with the United |
States Treasurer. certain amount of FIVE
twenty bonds. These bonds are deposited
TO secure the redemption of their outstand-
ing circulation, and bear six per cent in
crest. The Secretary of the Treasury asks
Congress to pass law requiring the banks
% surrender these bonds, and take in lieu
hereof other bonds bearing four and half
Der cent interest. The amount of these
'ut the average is probably about $780,
About S50,0O0,O00 Of these bonds
we're ''syndicated" out of the banks last
ear, but that was apparently voluntary
uri ender OF six per cent i'll exchange for
i've per cents. The Secretary now asks
congress for authority to practically seize
he 40O,0O0,0OO of six per cents now in the
'aults OF the the treasury belonging to the
'anks, and substitute therefor other bonds
earring four and half per cent. The
after bonds are not saleable in the market. |
he law prohibits their issue at less than
ar, and no man will pay 81 in gold for
hem when he can get six per cents at the |
anne price. Their value in the market
7ould probably be ninety-four to ninety
We cents. The Secretary proposes to CON
scate from five to six per cent Of the prin-
lpal OF the bonds belonging to the banks,
nd to contiscate one-third of the interest
n these bonds.
One-third or one-fourth of the bonded
ebt of the United States is in what are
nOwn as registered bonds, which substan-
ally is that the United States have re-
orded on their books several hundred mil
ons of dollars to the credit of various per-
ms, to whom the government pays at
ated intervals interest at the rate Of six
er cent. The bond itself is held by the
nited States. The United States have lust
le same power and control over these re-
stered bonds that they have over those
Tned by. the national banks, and the Sec
'tary might with as much propriety ask
lat he be authorized to substitute four and
ld half per cents for the registered six
or cents as he has to ask that he be au-
loized to make the like substitution in the 9
Use !'9 OF the bonds owned by the banks. i
ahese bonds are deposited with the G
treasurer, not because there is any partner. /
mp, real or implied in their property. but
IMPLY TO protect the holders Of national I
snk notes against loss in case of the failure i
the banks. The government has assumed,
u tne public protection, the custody of the
,cur1tles, and, in case of the failure of z
ank, to redeem the circulating notes from
re proceeds OF the sale of those securities.
nc soVefenent has no more legal control il
yer those bonds than it has over anv other S
onds owned by individuals or CORPORATIONS j;
nd the proposition Of the Secretary to take
re SIX per cents, and to Issue in lien Of
lem four and half per cents, is nothing
SIS than confiscation.
The law provides the mode by which the