New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-11-26
NTEREsT on BANK DEPOSITS.

VIEWS OF THE CONTROLLER OF The CURRENCY
HE RECOMMENDS LEGISLATION PROHIBITING IN
TEREsT on DEPOSITS IN ANY NATIONAL Or
PRIVATE BANK-RIGID ENFORCEMENT OF THK
ACT RELATIVE To THE CERTifICArIoS os
CHECKS.
WASHINGTON, Nov. 25.--The Forthcoming, re-
port OF the Controller OF the Currency will contain ths
following on the subject OF Interest deposits and
certihcation of checks"
In my last annual report referred briefly TO the evils
resulting from the payment OF interest upon deposits,
and my predecessors have frequently referred more at
length 10 the subject The difficulty has been tnat
the proposed legislation by Congress upon tins subject
would apply only to the National banks The eheeS OF
such legislation would be 10 bring State banks and saw
ings oanks, organized Dy authority OF the 9lherent
States in direct competition with the National banks IN
securing the accounts of correspondents and dealers
The National banks will be desrous OF retaining their
business. and the more interruptions woulf
hesitate to evade the law by Offering to make col
lections throughout the country free Oh cnarH'
TO buy and sestocks without commission and toi 10
discount paper at low rates The proposed action OF the
Clearing house In the City Of New;iork II adopted W
the Clearinghouse of the principal cities Of the Union
would do more to prevent the payment OF Interest on
deposits than any Congressional enactment but tno
evils resulting from the payment Of interest upon
deposits are by no means confined to the city Danks
IL may be safely said that tlis custom when preyas
almost every city and village OF the Union has done
more than any other TO demoraillo the business OF
banking State banks, private bankers, and assOcla
tions under the guise OF savings banks everywhere.
offer or interest upon deposits which canuot safely
be paid by those engaged In legitimate business Ss-
tona banks DESTROYS OF retaining the business OF Their
dealers also make similar offers. and tue result 10 NOS
only increase OF the rates OF Interest PAID 3yDushe
bur, consequence. investments In unsecured
loans bringing ultimate loss both upon tho sharehold'
ers or the bank and the depositors.
The kind OF legislation needed IL that WHICH sum
apply TO all banks and bankers ake whether OSaLtu
uuder che National Currency act otherwise. A law
prohibiting the payment OF interest deposits ny inc
National banks will have little effect unless followed ~
similar legislation under authority OF the different
states and there is little hope that such Legislation can
be obtained. Tho National Currency act, whioh was
passed during the provided for tax OF one-hs Oh
per upon all deposits, and subsequent lnernn
revenue legislation extended this tax to All deposits
made with state banks and individual bankers. ms
essentially war tax, and should, IN my Judgment
be repealed with other similar internal revenue Taxa
L recommend, II LEGISLATION Is prV.
posed on this subject, that the law be so amended
as 10 repeal this tax, so far as IL apples u ue.
mand deposits, and that increased rate Oh
taxation be imposed uniformly upon all deposits whlcn,
either directly Indirectly, are placed win DdnAo
bankers with the offer or expectation OF RECEIVING
the effect only reduce the rate OF Interest through
out the country but WILL at the same time, prevent s
iegitmate organization OF savings banks the Orgah
ton OF which should De allowed only upon the conuVn
that the savings Of the people snail DE- careiuy anu
prudently invested, and the interest arising theteO.
after deducting reasonable expenses distributed O
time To the deposltors aud To no other person'
whatsoever. . ,..,
The act of March s. 1862 authorizes the appointments
OF receiver II any officer, clerk or agent VI any va
bank unless the person company drawing SAID ebe
shall deposit IN said BANK at the tlme slu cue
is certified an amount of money equal 20 the amouns
specified such check Receivers have been appOlno
York. ana tue New-Orieans Banking Association durnk
the past year violations Of tls act and ~ IS S
tentou OF the Controller hereafter 10 rSidy ohi"N~
TINS whenever he Is satisfied Of such voLiIiop'