New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1876-01-12
TAXING BANK DEPOSITS.
TREASURER NEWS STATEMENT or THE IA~-Nt
DEDUCTION FOR RESERVES.


DEDUCTION FOR RESERVES.
F. D. Tappen, President of the Gallatin
National Bank OF Walst wrote recently 10 the Treasury
Department at Washington relative TO the tax OF Il oi
per cent on deposits. His letter included the following
The act OF Congress imposes tax Of "ouchaf OF one
per conum each MALT year upon TIE NOES III
one-uafer one per ccn:um on deposits; ohequaftr
OF per centum caritai etc. beyond the amount II
Court decided On Wallace, 26) at United states notes
or legaltender notes are Obligations within the mes
of the acts rXenptmg United states bonds from Sttte
and municipal taxation. Is n not. Therefore perfectly
legal deduction that the legal tender notes which BANKS
tIelr vaults ilc a. ies,l e, o
from Which OF course not the slightest prOht cdi ccile
to the shareholder are in law - in TACT so lar as inns
speces OF taxation concerned Government bonds, and
as such as proper deduction from the average chhlaI
or deposits FOR semi annual duty as any OF the interest
bearing obligations OF the United oate-i j. u not aspa
fair inference that the words beyond the amount ~
vested in United States bonds refer to the preceding
sentences in the section Of the National Currency act I'M
posing the tax OF semidnnual duty ON cciaOn urP"S
s. and capilal 1t appears 10 me extremely UNJUST A.
Repatriation OF the law that should pay tax on de-
posts which Obliged by law TO withheld rom use
and which are thus pOWerless to earn tn duty the con
structon the law by the Treasury Department has
thus far imposed upon them
Treasurer Kew replied that Il his duty to require
report OF the average OF ali the deposits, and 10 make
the assessments provided His answer TO Mr. TappcnS
argument was as follows:
Section 215 Revised Statutes OF the United States re-
quires each National bank shall report the aver
age amount OF it's deposits for the SiN months pre-
cedng the LIST day Of January and July In each year 10
enable the Treasurer TO make an assessment OF one
quarter OF per cent on tho amount 80 reported
There Il no provision IN the law for deduction 90 TIC
amount OF deposits held reserve, and therefore no nu
thory for authorizing on permitting deiuclo or i"r
receiving any return that does not E1Ne the average
deposits in full to the credit Of the Treasurer OF
the United States. II is true, a. you state ihht ne
reserve lies idle in the bank and cannot 81 itself
earn the duty imposed nevertheless tho fact
mat there l. . reserve enables tho bank u make
active use Of the great bulk OF deposits without Impair
ing the confidence Of dcpOsJrs To Keep the reserve H.
an Obligation conceded by tie bank in it's organization,
as means securing the benefits that may result nom
the advantages required. Hrceard 10 Tie decision oil ne
supreme Court, which you rocr, 40 not feel AZ No
erty TO interpret it releasing United states noie from
the duty imposed by the Government on the proportion
OF such notes bank may have in reserve, n provided
by Lag. II would require decisiC OF opinion having
direct reference 80 the question YOU rase TO sccue AM
change on modification OF the ruling heretofore adopted
by TINS Department.