The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1876-01-14
FROM WASHINGTON.
Taxing Bank Deposits.

TREASURER NEWS STATEMENT VI THE LAH--No
DEDUCTION PoR RESERVES.
F. D. Tsppen, president OF the Galiatin
National Bank, OF Wall street, wrote recently
to the Treasury Department at Washington
relative to the tax of one fourth OF one per
cent. on deposits. His letter included Inc
following:
.sThe act of Congress imposes tax OF 'one
bali of one per centum each half year upon
the notes in circulation; one quarter OF one
ner centlim on deposits one quarter OF one
ner centum on capital, ETC., beyond tue
amount invested in United States bonds
Now. the Supreme Court decided I'm wal
lace. 28) that United States notes or ie2ai
tender notes are obligations within the mean
;ng of the acts cxempting United states
bonds from Stateand municipal taxation. Is IL
not therefore, perfectly legal deduction thas
The lepa.tcnder notes which banks are COLL
nplle6 TO retain in their vaults idle as reserve,
and from which, ,of course, not the slightest
nrofit can accrue to the shareholder, are IN
law "a in fact, so far as this species OF TAXA
tion il concerned, Government bonds, anu as
such as proper deduction from the average
capilal or deposits for semi.annuai outy as
any Of the nterest.bcaring obligations OF tne
limited States +? Is it not also fair Inference
That the words beyond tie amount invested
IN limited States bonds refer TO the pre-
ceding sentences in the section of the ma
tiopsl currency act imposing the tax or SEMI
annual duty Oh circulation, deposits, or capl-
tai! II appears to me extremely UNJUST, as
I believe it contrary to the spirit, intention,
and strict Interpretation Of the law that we
shonId nav tax on deposits WATCH we are
obliged by law 10 withhold from use, and
wbich are thus powerless 10 earn the duty
the construction OF the law by the Treasury
Department has thus far imposed upon
Them"
Treasurer New replied that 1t was bis duty
to require a report OF the average Of all the
jeposi,s and to make the assessments pro-
Weed. His answer to Mr.. Tappen's argu'
mcnt was as follows:
UScction 52l5 Revised Statutes Of the
| United States requires that each national
| bank shall report the average amount OF is
| deposits for the six months preceding the
| 1st dav OF January and July in each year, to
| cuable the Treasurer to make an assessment
| of one quarter Of one per cent. on the
amount 50 reported. There is 10 provision
in the law for deduction OF the amount OF
| deposits held Is reserve, and therefore no
authority for authorizing or permitting q de-
duction, or for receiving any return That
does not give the average deposits in
full to the credit Of the Treasurer Of the
United States. 1t is true, as You
state. that the reserve lies idle IN
the bank, AMI cannot OF itself
earn the duty imposed; neverthel ess, the
fact that there is reserve enables The bank
to make active use Of the great bulk OF de.
posts without imparing the confidence OF
depositors. To keep the reserve Is an ooil'
cation conceded by the bank in its organ'za'
ton as 4 means OF securing the benefits that
may result from the advantages required. In
regard to the decision Of the Supreme Court
to which you refer do not feel at liberty 10
interpret it rs releasing United States notes
from the duty imposed by the Government
on the proportion of such notes the bank
NAV have in reserve, az provided BY law. 1t
would require decision or opinion having
direct reference TO the question you RAISE 10
secure any change or modification OF the
ruling heretofore adopted by this Depart
meutN