Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-11-08
TREASURY MISMANAGEMENf.
How the First National Bank OBJ
tanned Government Funds without
notwithstanding Richardson Res

| MoW tne EIFsb HstttOtAstA 1sseAA OD
tanned Government Funds WithOu,
notwithstanding Richardson Res
pOnsibIe. =. - FT -
From the New York Tribune.
/ WASHINGTON, Nov Facts regard
ing the government money illegally in
possession of the First National Bank
of this city when it, failed continue to
be developed, and the more that is
known of the case the more discredita-
bic it appears for the Treasury Depart
ment. 1t has been a rule of the De-
partment, extending back to the time
when Mr.. Chase was Secretary, to send
National banks in various parts of the
country fractional currency In sums de-
sired on the receipt of a certificate of
the bank that an equal amount of
greenbacks has been deposited to the
credit of the government In that bank.
The United States Treasurer would
then draw the amount or apply it for
Government purposes In the locality.
The fortunes of the First National
Bank were almost always in a desperate
condition, and the Cashier, since dead,
was continually in the habit of inpor-
tuning Government officers, particularly
disbursing officers, to keep their ac-
counts at his bank. AS some of these
officers had frequently millions of dol
lars to their credit, it may be readily
seen that it was an object for the bank
to retain such depositors. Mr.. Spinner
says it has always been the hardest
matter to get the Government money
out of the bank, and he had to ask dis
bursting officers not to deposit in it so
heavily. Finally law was passed by
Congress prohibiting discussing Of
ficers from depositing Government
funds in any bank in a city wherein
there was Treasurer or a SUBJ Treasu-
rer. 1t was therefore Illegal, by the
act of June IA, 1866, for any disbursing
officer to deposit Government funds in
the First National, and the deposits of
that character were withdrawn.
The Secretary of the Treasury is not
a disbursing officer, but to him was due
the responsibility of the bank having
S287,000 of Government money when
it failed, with security for but 100000.
The rule regarding the furnishing of
currency to banks on their certificates
did not apply in Washington, for the
banks here could in few minutes
bring their greenbacks to the Treasury
and exchange them for small currency
without any expense whatever. The
officers of the bank, when it was in
great want of funds, often appealed to
the Secretary of the Treasury to change
the rule so as to enable them to obtain
currency In the same manner as foreign
banks, the object being to get the
currency and delay or postpone pay
ment on the Treasurer's drafts. But
the appeals were steadily refused under
the advice of Mr.. Spinner who knew
the difficulties in the wayof collections,
and the rule remained unbroken until
Mr.. Richardson became Secretary of
the Treasury. Less than week before
the First National failed, application
was made to him by the bank to abro-
gate that rule, in a measure, so as to
enable it to receive money to which, it
was entitled, and this Mr.. Richardson
did, against the circumstances of Mr..
Spinner and some of his chief officers,
and the bank received fractional cur
rency amounting, it now appears, to
nearly 100000, if not to that exact
amount
When the bank closed, the amount
due the Government without a dollar
TO secure it was $751;, 900, notwithstand- |
ing the strong efforts made by the |
Treasurer to obtain at least a portion
IF it by draft. Secretary Richardson has
said within a day or two that the Gov
has been secured against loss. |
How has it been secured? The Treas
Ter, who is the official keeper of the |
securities, has no such security in his !
-aults, nor has he seen any. If the |
has such security, why is it |
lot in the hands of the proper officer
md a record made of it? Nobody is |
Illowed to know what the nature Of the |
security is nor who furnished it, and |
nobody but the Secretary knows where |
t is. 1t is the only security of its |
lind in the possession of the Treasury