Evening star. [volume] (Washington, D.C.) 1854-1972, 1881-03-12
The National Bank Problem.


DECISION OF THE TREASURY AGAINST THE BANKS.
The following is the full text OF the decision
not to allow the national banks to Withdraw
their legal tenders, which was reached at the
Cabinet meeting yesterday, as announced In
THE STA r last evening:
"TkEAsURY DEPARTMENT, WASHINGTON, D. C.
March, II, 1SS1.-PreSldent Merchants National
Bank, Cleveland, Ohio.-Sir: l am In receipt of
your letter OF the 5th instant, stating that your
bank had, during the previous week, deposited
SS0, 900 in legal tenders with a view OF retiring
that amount OF It's circulating notes; that the
bonds to secure the same. amounting to $200, 900
had been forwarded from the treasury in this
city to New York, and that bank now desires
TO return them to the treasury OF the United
states and receive back the above amount OF
legal tender notes. AS the action taken In
this case would establish a rule by which
the department. would necessarily be governed
In regard to similar requests from other banks,
some delay In answering your letter has o.
Cured 1t seems that since the 10Th ult. about
$l9 DOC, 600 Of legal tenders have been deposited
by banks for purpose like that mentioned by
yours. OF this amount about 81 900 900 was re-
turned by the treasurer, requests therefor hav-
Ing been received before any redemption OF
notes had been made or the security bonds de-
livered. In such cases. the transaction being In
complete, the department had clearly right TO
return the notes, as has been done. OF the re-
naming amount tabout 81 800 000) the security
bonds therefor have either been surrendered
or redemptions against the amounts depos-
ted have already been made and the
transactions have been so far completed that
II has been decided that the precedentS of the
department in similar cases should be adhered
to- and no return OF the legal tenders be made.
In this connection 1t should be stated that no
apprehension Of unfavorable results need be
entertained in this matter. Since the 25th ult
the department has paid out for bonds pur-
chased about So 500 900, and Is to-day paying
out on like account an additional amount Of
S. 0O0, 900. In addition to these payments there
has been advanced from the treasury since the
lst inst. to meet the payments of arrearages of
pensions the amount OF 81, 5S3, 433, and on
the list prox. there will fall due of interest
more than SI,00O,90O. and there are on hand
OF incomplete national bank notes. which can
he issued at once TO the banks, the amount OF
81 OO0. coo, which, in the aggregate, IL Will be
observed, will take an amount from the treas.
ury largely in excess OF the amount OF the
legal tender notes which has been deposited
by the banks since the 10Th inst. and which
IL is now desired should be returned. Letters
have also been received asking II the Identical
United States bonds held as security for circu-
la,iDg notes which were recently Withdrawn
by the national banks can be redeposited With
cut transfer. This request Will De granted II
the bonds bear no assignment except that OF
the treasurer of the United States to the bank
returningik Very respectfully.
III. +. FRENCH, Acting secretary"
Although signed by the assistant secretary
the ABOVE Is the statement of Secretary Win
dom, prepered after the Cabinet meeting.