The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1886-09-05
A 1ETl ISSUE RAISED
BETWEEN ATlOSAL BANKS AND
THlTREASURY.
The Right TO Allow Called Three
Fer Cents I, Remain rs Se.
curity TO- Circulation.

Washington speial: The issue has
been made between the Treasury
Department. and sole Of the nstion'
al banks In the inter of The right
OF national ban to permit the
called 8 per cent. binds to ensin
in the Treasury as security for
circulation. One OF tie Washington
banks has announced bat il minds
10 leave its called 3 per cents with the
Treasury as the securityrequired by
law for its circulation, AMI there are
some banks whose bondswere called
ever in the 18TH call which have mot
yet replaced them by per cents.
The Comptroller OF the Currencyhas
sent notices to sll OF thes banks Sat
ing that the bonds have been calledRnd
demanding that they be replaced
by 4 per cents. In some instancesthe
banks have indicated purpose to
contest the right OF the Jompuo.let OF
the Currency to require them TO anr-
render these bonds, AMI to purchase
new ones to take their place. The INV
is plain as to the requirements lor
taking out circulation, but 1t is silent
ss TO the disposition OF he bonds after
they are called. The law provides
that circulation shall only be Issued
upon interest bearing securities OF the
United States, and, OF course, circulA-
ton has never been issued exceptup0n
the deposit Of such securities. ]
The cashier OF leading bank, how
ever, to which one OF the notices OF
the Comptroller OF the Currency was
sent, has replied that his bank did de-
post in the Treasury before takiog
out for circulation the amount of in
terest bearing securities OF the United
States that was required for the
amount Of circulation, and that he
(the cashier) would be glad to be ad-
vised by the Comptroller of any pro-
vision Of law which imposes any fur
ther obligation in that respect upon
the bank with regard to those securi-
ties. The banks, 10 short, make ths
point that having complied with the
law by depositing interest bearingse-
curities OF the United States before
they received circulation, it does not
concern them that by no act oftheirs
these securities have ceased to be in.
terest bearing. They maintain
that, having deposited the Sc
curities that are required by
the law, there is no further obligation
upon them, aud that the government
cannot deprive them of circulation
which WAS obtained on the basis OF
awful deposit, the character Of which
has been changed by the act OF the
government itself; that, moreover,
he government holds these called 8
Der cent. bonds, which represent 100
,ents on the dollar, against which it
las Issued circulation, even in the
.ass where the full amount has been
AIKEN out for only 30 per cent OF that
m punt; that, consequently, the gov
rnment holds full and ample security
or the circulation.
The office OF the Comptroller OF the
currency, on the other hand, maiu-
aims that the called bonds, which, in
he technical phrase, are dead"
onds, are not legal security for the
and the opinion of the
attorney General has been asked upon
his question.
This same question has been ra 'sed
'efore, when the process OF refunding
Irst began, and it was decided by de-
artment ri ing that the called bonds
Vere not good as security, but no final
pinlon was obtained from the Attor-
ey General upon the matter, as the
anks were not disposed to contest the
uling Should the decision OF the
Ittorney General declare that the 3
er cents cannot be used as security
fter they have been called, it is the
pinion Of banking men here that the
per cent. bonds will be enhanced |
omewhat in value.
1t is supposed that had the polit;-
ians Of Louisiana known that Man
ing was being considered, very
,roDg effort would have been made to |
ave defeated the appointment. He
in harmony with the political pow
re- OF l. 1uisiana, but is looked upon q,
cling tinctured, more or less, with
notions. President
leveland never heard OF him until
[r. Bayard recommended his appoint
lent. Mr.. Bayard said he was good
ian, and laid particular stress upon
le fact that he was very high toned
,ntleman. Judge Manning will leave
r his post OF duty in few days, aud
opes to arrive at his destination and
sumo charge on the 18th proximo.
. is about 90 years OF age, and OF
ther fine presence. He is also re-
tied to be quite wealthy, having a
nv large aaInte in the lntarinr ha-