New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-03-12
!. rpr RANKS AND THE TREASURY.

srsss.
TIE BANKS AND THE TREASURY.
prc,srcs BY THE PRESIDENT AND HIS CABINET
rBAT BANKS CANNOT LEGALLY RRpEPosir THE
posps THEY HAVE wITHDRAwN.
InY TELEGRAPH TO Tue rRIBuSsi
WAsyuSGroN, March 1.-THE Administration has
,s.,e NJ rst important decision in financial mat
says. end the conclusion is one which the public
undoubtedly will heartily approve. The Secretary
~ the Treasury has decided the $1s,OOO.OOO OF
lawful money, which the National banks had de-
osted with the Treasury for the purpose OF retiring
their circulating notes and to withdraw their Sc
cnrisy bonds cannot be returned to the banks as
Ali of them have requested but that the process OF
retrring that amount of currency legally begun
must, under the law, be continued.
The subject has received the careful con-
s;aeration of the entire Cabinet. The Department
1es;des "a adhere to the precedents which have been
adouted IN similar cases. and declines to return the
lersi.tenders to the banks. The banks, therefore,
which surrendered their circulation in the fear that
the Funding bill with the Carlisle or fifth section
would become law, will be compelled to suffer
temporary inconyenience but this inconvenience Is
not so reat as seems to be apprehended, and the
result need not--unless the banks shall wish li-be
contraction of o single dollar OF National bank
currency. 1t is true that the eighteen millions OF
lawful money which have been deposited will not DO
reurned but the fourth section of the Act OF June
20. 1874. is still upon the statute-books and the
hanks under il can at any time deposit new bonds
and take out additional circulation, as they have
done since the act was passed.
The decision gives the banks the privilege OF
using the identical bonds which they withdrew as
the basis for new circulation in case tho bonds
hear no assignment except that of the Treasurer OF
the United States and the banks retiring them.
This portion of the decision win be of special ad-
vantage to the banks as 1t will permit the bonds to
retain their old numbers The Funding act requires
that in the redemption or purchase of bonds the
latest numbers shall be called first. By permitting
the banks to retain the identical bonds which they
have already withdrawn they retain the original
numbers and thus may hold their bonds longer
than they would be able to do If they were required
10 purchase new bonds for their new circulation.
Az the hour for to-day's Cabinet meeting ap-
proaebed the interest in the National bank circula
tion question increased. and the Secretary of the
Treasury's room was crowded with persons OF all
professions, who eagerly awaited hoped-for hint
of what was likely TO be done.
The Cabinet meeting convened shcrtly after IL
o'clock. All the msmbers were presents Secretary
Windsm took with him from the Treasury Depart
meut large portfolio filed with statements, copies
Of letters ETC., pertaining to the request of the Ma
tona banks relative TO the withdrawal of their
cent legaltender deposits for the retirement of cir
culation. The consideration OF this subject was
yery exhaustive and 1t was the only business of
importance transaeted at ths meeting. The request
made by tho National banks was finally decided, and
Secretary Window was authorized to prepare the
dec:sion which was not completed until late in the
afternoon The text of the decision is as follows:
TREASURY DEPARTMENT
WARRINGTON. March H. 1881. !
President Merchants National Bank, Clepetdnd. Ohio.
Sin: am in receipt Of your letter OF the 9th
inst stating that your bank had during the previ.
ors week deposited with the Assistant Treasurer at
New-York $3.50, ,O00 In legal-tendeIs with view OF
retiring that amount of its circulating notes. that
the bonds to secure tho same, amounting TO
5000 900, had been forwarded from the Treasury in
this civ 10 New-York. and that the bank now de-
sres to return them to the Treasurer of the United
States and receive back the above amount OF legal
tender notes. AS the action taken in this case would
estabhsh q rule by which the Department would
necessarily be governed in regard TO similar requests
from other banks, some delay in answering your lot
ter has occurred.
$4,000 900 of legaltenders have been deposited
by banks for purpose like that mentioned by you
this amount about one million was returned h Dy
ceyed before any redempons OF notes had been made
on the security bonds delivered. In such cases. the
trspsaction being incomplete, the Department has
clearly right to return the notes. as has been DONE
OF Che remaining am0unt-about 5000, ,0O0-the
security bonds therefor have ,.t either tb been sur
posted baye already been made ana the transac-
;.cns have been 30 iar SompieteoM ar tnaE mas oeen
seeded tnot the p5ecsdel u ~ e nd po ra.n ~
umuaI cases snouiu oe sAefOu 'o' auu "o i0'uAn VI
We lsgal-tendefs be made.
ln tins connsction II eb9ulo oe ssatea shat no ap
rrsnension o. sSS a aeea at ee enter
Dsparsmept has paid out for bonds purchased about
s6 and is to-day paying % ons D on IKE account
e ADDITIONAL amount % oi :U sdvancsd M sddtOn tr0
Che Treasury since the 1st instant TO meet the pay
ments OF arrsarages OF pensions. the amount OF
yeoSosa ii. 90 sna On t In1 SS 160 nm snd ,hsna VIII
M s' oas oI more tn ; % Gnu ..eIe